The Financial Markets Authority surveyed banks, financial advisors and insurance companies to find out how AI was being used.
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The Financial Markets Authority will not set rules around the use of artificial intelligence by financial service providers just yet.
The regulator surveyed banks, financial advisors and insurance companies to determine how AI is being used in the sector.
It found AI is used to cut business costs, detect fraud and manage risk but firms are also working towards applying AI to customer communication such as online chat bots.
Chief economist Stuart Johnson said technology was developing so quickly it was unclear how AI would be used in the future so it was important to keep talking with businesses.
“What it’s absolutely not time for is FMA guidance around AI so I don’t imagine that we will be going down that space, certainly in the next 12 months.
“We want to walk arm and arm with industry as we deal with this new technology and we understand its strengths and its weaknesses. Then maybe sometime in the future when things are clearer, we might get into the guidance space but right now it’s about working with industry.”
Johnson said the FMA wanted to help businesses innovate using AI while balancing risks.
It was pleasing to see many firms looking for ways AI could improve customer outcomes, he said.