- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Jeff Dale2023-06-07T19:00:00
The Consumer Financial Protection Bureau (CFPB) flagged risks Tuesday regarding expanded use of chatbots by financial institutions, specifically for customer service purposes.
The agency said it has received numerous complaints from frustrated customers attempting to dispute transactions or resolve account issues, only to get stuck in endless “doom loops” caused by customer service automation.
“To reduce costs, many financial institutions are integrating artificial intelligence technologies to steer people toward chatbots,” said CFPB Director Rohit Chopra in a press release. “A poorly deployed chatbot can lead to customer frustration, reduced trust, and even violations of the law.”
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The Consumer Financial Protection Bureau warned lenders using artificial intelligence in credit denials that consumers must receive accurate and specific reasoning—and not checklists—for why a credit request was denied.
The Consumer Financial Protection Bureau ordered ACI Worldwide to pay a $25 million fine for improper data handling that led to approximately $2.3 billion in erroneous mortgage payment transactions.
The Federal Trade Commission is closely tracking company use of artificial intelligence tools for possible rule violations involving deception, discrimination, excessive manipulation, or unfairness.
Data governance has become a key concern for companies, especially when the EU AI Act and General Data Protection Regulation have put a premium on handling data responsibly and ensuring that artificial intelligence does not cause harm.
The era of artificial intelligence adoption is testing the old ways of doing compliance, underscoring the need for continuous monitoring. Compliance isn’t a one-and-done activity, but sometimes organizational incentives and goals fail to prioritize the importance of this.
While companies are exploring and building artificial intelligence technology, lawmakers and regulators are trying to identify what ground rules they need to set. These guardrails are what companies and governments alike believe are essential parts of ensuring safe and responsible use of the technology.
