The government is in the midst of developing an expert policy committee that will formulate a comprehensive artificial intelligence (AI) policy document for The Bahamas, Attorney General Ryan Pinder said yesterday.
Pinder, who made the remarks during his address to the Association of International Banks & Trust Companies’ (AIBT) The Nassau Conference yesterday, said AI can have either “tremendous” benefits for the financial services industry, or “pose significant threats”. He said the government wants to do a proper SWOT (strengths, weaknesses, opportunities, threats) analysis on utilizing AI in The Bahamas, including in the financial services sector.
“Some argue that artificial intelligence fosters innovation and the streamlining of operations, enhances customer service, boosts risk management and reshapes capital markets,” said Pinder.
“Others argue AI presents risks to consumers and financial institutions, such as fraudsters leveraging AI tools, misinformation dissemination and use, and security breaches of sensitive banking data.
“There is also a concern that AI can replace the analysis and evaluation of investments for clients, thus presenting a risk to institutional revenue.”
He said the government of The Bahamas recognizes these risks and opportunities, and therefore will convene the expert policy committee.
“We look forward to its input as we develop the policy to ensure that we can maximize AI in the financial services industry while mitigating the threats and concerns,” he said.
Pinder also explained to the AIBT conference that it might be the right time for the financial services industry in the country to develop blockchain-based decentralized autonomous organization (DAO) structures, which he said have matured over the past few years.
He said the Securities Commission of The Bahamas is working on structures and a corresponding scope of regulation for DAOs. He explained that DAOs are “a blockchain-based, community-owned entity with no central leadership, governed by code and member votes through smart contracts”.
He added: “We are looking at structures using either a legal entity, possibly a fund structure; or a legal arrangement, possibly utilizing a purpose trust structure; as viable structuring options for DAOs. We think this is very exciting and will be a welcomed development internationally in the fintech space.”
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