Switzerland has not yet introduced an AI-specific regulatory framework. Financial institutions utilizing AI must comply with the general legal framework and FINMA’s supervisory expectations.
Key Take-aways
1. Switzerland has not yet introduced an AI-specific regulatory framework. Financial institutions utilizing AI must comply with the general legal framework and FINMA’s supervisory expectations.
2. The EU AI Act introduces new regulations on AI systems, affecting not only EU entities, but also Swiss companies that supply AI systems to the EU or deploy systems whose output is used within the EU.
3. Financial institutions and insurance companies must adopt AI governance frameworks and stay informed about regulatory developments to ensure compliance.
1 Introduction
Artificial intelligence (AI) has become a key driver of innovation in the financial industry, where it is employed in a wide range of use cases, including fraud detection, risk management, cash flow forecasting, process automation, credit risk analysis, customer relationship management, trading algorithms, IT development and information analysis. While recent developments in generative AI offer considerable opportunities, they also present risks. As a result, financial regulators worldwide are intensifying their supervision of AI applications used by financial institutions. This newsletter provides a high-level overview of the current state of the Swiss regulatory framework applicable to financial institutions using AI applications, as well as the EU AI Act, which may affect financial institutions that supply AI systems to EU-based entities or deploy AI systems whose output is used in the EU.
2 Swiss Legislative Framework
Switzerland has not yet adopted a comprehensive AI-specific regulatory framework. In 2020, the Federal Council has adopted the Guidelines on Artificial Intelligence for the Confederation which apply only to the Federal Administration. Regarding the private sector, a Report by the State Secretariat for Education, Research and Innovation (SERI) to the Federal Council, published in 2019, concluded that there was no immediate need to introduce Swiss legislation dealing with AI.
Read full article here
