Artificial intelligence: accelerator or panacea for financial crime?
| Published date | 01 April 2019 |
| Pages | 634-646 |
| Date | 01 April 2019 |
| DOI | https://doi.org/10.1108/JFC-08-2018-0077 |
| Author | Peter Yeoh |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
Artificial intelligence: accelerator
or panacea for financial crime?
Peter Yeoh
School of Law, Social Sciences, and Communications,
University of Wolverhampton, Wolverhampton, UK
Abstract
Purpose –This purpose of this viewpoint is to addressthe intended good and unintended bad impacts of
artificialintelligence (AI) applications in financialcrime.
Design/methodology/approach –The paper relied primarily on secondary data resources, business
cases and relevantlaws and regulations, and it used a legal-economics perspective.
Findings –Current AI systems could function as antidotes or acceleratorof financial crime, in particular
cybercrime. Researchsuggests criminal law could be applied via three approachesto curb these cybercrimes.
However, others consideredthis to be an inappropriate mechanism to hold AI agents accountable, as present
AI systems were not deemedcapable of making ethically informed choices. Instead,administrative sanctions
would be consideredmore appropriate for now. While keeping vigilance againstAI malicious acts, regulatory
authorities in the USA and the UK have opted largely for the innovation-friendly, market-oriented,
permissionless approachover the state-interventionist stance so as to maintain their globalcompetitive edge
in this domain.
Originality/value –The paper reinforcedthe growing arguments that AI applications should be deployed
more as panacea for financialcrimes rather than being abused as crime accelerators. There equally though is
the need for both public and private sectors to be mindful of the unintendednegative, harmful consequences
to society, especially those connected to cybercrime. This impliedthe further need to beef up attention and
resourcesto help mitigate these risks.
Keywords Cybercrime, SEC, Financial crime, Frauds, Artificial intelligence, FCA
Paper type Viewpoint
1. Introduction
Artificial intelligence (AI) is perceived in US legislation as any artificial system that
performs tasks under varying, but predictable circumstances and without significant
human oversight. Such systems could also learn from their experiences while improving
their performances and might even solve tasks requiring human-like perception, cognition,
planning, learning, communication or physical actions (Hoadley and Lucas, 2018). AI
systems as they evolved overthe years have been linked to systems that think like humans,
act like humans, think rationallyor act rationally.
Applications of AI systems are generally viewed as positive for economic growth and
productivity (Furman and Seamans, 2018). However, as AI systems evolved, various
myths have been generated, especially on the idea that AI might constitute an existential
threat for humanity. This is deemed to be one of the most widespread myth and is at the
root of numerous misunderstandings and fears surrounding AI systems (Bentley et al.,
2018). There are, however, legitimate apprehensions about the deployment of AI
systems to harm society including the perpetuation of financial crimes (Forwood and
Bolton, 2018).
Financial crimes,already a huge problem in almost every economy in the world, have not
receded sufficiently despite various countermeasures across the world. Financial crimes
JFC
26,2
634
Journalof Financial Crime
Vol.26 No. 2, 2019
pp. 634-646
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-08-2018-0077
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