IMPACT OF ARTIFICIAL INTELLIGENCE ON THE BANKING SECTOR AND REGULATION

This thesis approaches the impact of Artificial Intelligence (AI) on the banking sector and its regulation, highlighting the different contributions it could have in the sector, such as the use of robo-advisors in asset and investment management, fraud detection, and credit decision-making. It also examines how Portuguese banks, and the central bank are responding to this innovation. It also analyses the role of regulation in the sector, given the new challenges posed by this technology and the differences in legislation across regions, comparing the regulatory strategies of China, the United States, and the European Union. Using a qualitative methodology based on semi-structured interviews with experts in the banking sector, the results show that while AI offers significant efficiency and productivity gains, it also poses challenges in terms of the transparency, explainability, and accountability of models in decision-making processes. Finally, the research concludes that the implementation of internationally recognized regulation is crucial to ensure the safety of AI models and the protection of customers in a globalized environment. The findings highlight the importance of striking a balance between innovation and the development of technologies and maintaining customer safety and privacy.