Nasdaq Inc. warned that over-regulating artificial intelligence risks creating an opportunity for criminals to leverage the burgeoning technology in financial markets to stay ahead of detection.
(Bloomberg) — Nasdaq Inc. warned that over-regulating artificial intelligence risks creating an opportunity for criminals to leverage the burgeoning technology in financial markets to stay ahead of detection.
“Criminals don’t have a regulator,” Nasdaq Chief Executive Officer Adena Friedman wrote in a LinkedIn blog post alongside the exchange operator’s first quarter earnings release. “We can’t create an environment where criminals can move more quickly than trusted actors.”
Financial crime should be of interest to more than just market regulators due to its links to other crimes like human trafficking, terrorism and the drug trade, Friedman said. Under her leadership, Nasdaq has made identifying that crime a key pillar of its growth strategy, including a $2.75 billion purchase of fraud-detection software provider Verafin Inc. in 2021.
Nasdaq said in its earnings report on Wednesday that its anti-financial crime unit secured its first “global tier-1” banking client in April, and posted a 17% year-over-year sales increase to $84 million. The company also has healthy pipeline of potential customers in medium and large banks, Friedman said during a conference call with analysts.
The massive swings in bank deposits caused by the recent collapse of several regional lenders has also served to underscore the need for a dynamic anti-financial crime solution, she said.
Nasdaq was among the top performers in the S&P500 Index on Wednesday morning, trading up around 3.3% at 9:37 A.M in New York. The company’s shares were down about 9% this year through Tuesday.
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