The recent digitalisation of financial planning and retail distribution of UK financial services has been subject to speculation about its future and growth. Several definitions have emerged, ranging from cyborg, robo-advice, automated advice, and digital distribution to virtual reality financial planning.
Responsibility for robots
Advanced robots of the future could be given their own legal status under plans MEPs have recently asked EU policymakers to consider. Despite Brexit, EU regulations are still likely to affect the UK as we will remain members of the Article 29 Working Party Group and will still seek to have ‘equivalence’ to EU regulation.
The European Parliament has passed a resolution that calls on the European Commission to put forward proposals for new EU legislation that addresses ‘legal questions related to the development and use of robotics and artificial intelligence foreseeable in the next 10 to 15 years’, together with accompanying guidance and codes of conduct to cover issues such as the ethical design and operation of such machines.
In its resolution, MEPs said the Commission, as part of its proposals, should consider whether ‘a specific legal status for robots in the long run’ should be provided for ‘so at least the most sophisticated autonomous robots could be established as having the status of electronic persons responsible for making good any damage they may cause, and possibly applying electronic personality to cases where robots make autonomous decisions or interact with third parties independently’.
The European Parliament resolution builds on a report Luxembourgish MEP Mady Delvaux produced for the Legal Affairs Committee last year, raising the idea of a tax on robots.
MEPs say draft legislation is urgently needed to clarify liability issues, especially for self-driving cars. The proposal contains recommendations on how robot liability could be addressed prior to any new ‘electronic persons’ status being established.
A strict liability regime could be established, or, alternatively a risk management approach could be provided for under new laws. The motive is to ensure consumer protection to avoid detriment and ensure liability is apportioned.
The proposal also outlined the potential for a mandatory insurance scheme to force producers or owners of robots to ‘take out insurance cover for the damage potentially caused by their robots’, and that an underlying compensation fund could be set up to provide for damages payouts in cases where insurance cover is absent.
Capacity for self-learning
The extent of a robot developer or operator’s liability could also depend on ‘the actual level of instructions given to the robot and its degree of autonomy’, the proposal said. However, it made a distinction between a robot’s programming and its capacity for self-learning.
‘The greater a robot’s learning capability or autonomy, and the longer a robot’s training, the greater the responsibility of its trainer should be,’ the resolution says. ‘In particular, those skills resulting from "training" given to a robot should be not confused with skills depending strictly on its self-learning abilities when seeking to identify the person to whom the robot’s harmful behavior is actually attributable.’
Although automated distribution in financial services is essentially just a tool to help the investment solution or recommendation, this proposal could move the boundaries and blur the distinction between human adviser and a machine.
It will be interesting to see how this develops. Automated advice has to face the added implications of the General Data Protection Regulation, the Information Commissioner’s Office ‘Big data, artificial intelligence machine learning and data protection’ paper, the FCA’s Algorithms assessment and the automated implications under Mifid II.
Peter Smith is head of industry liaison at Tisa.