Fintech for the Common Good: Principles for Financial Regulation Technology
Throughout 2024, the Fintech for the Common Good interdisciplinary lecture series will host distinguished speakers from the fields of finance, law, and computer science to spur discussion and research collaborations at UMass Amherst.
Abstract: While financial markets change with the introduction of new technologies and financial instruments, and regulatory technology evolves to correspond to these market changes, the general principles underlying the effective use of financial regulatory technology remain constant. These fundamental principles derive from the role of regulatory technology as part of a complex ecosystem of laws, regulations, business processes, and data. Some key principles are the focus on large and/or repeated violations that disadvantage other market participants, the limited resources available to regulators compared to market participants, the minimal or non-existent amount of labeled data available to regulators, the need to link transactions by ownership or cooperation, the need not only to find violations but also to identify convincing evidence for follow-up actions, and the composition of legal and necessary components of the financial system for unintended and inappropriate purposes. These principles are illustrated with two examples of the design, development, introduction, use, and evaluation of applications at the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and the Financial Regulatory Authority (FinRA) to detect and prevent money laundering and unfair market behavior, respectively. Technical challenges resulting from subsequent changes to financial systems and current uses of regulatory technology are identified, concluding with speculation about impacts from the recent development of large pre-trained models.
Bio: Ted Senator has led the design and development of financial regulatory systems at both the Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) and the Financial Regulatory Authority (FinRA), receiving the Innovative Application Award from the Association for the Advancement of Artificial Intelligence for both. As a two-term DARPA program manager, he conceived and led research to enable new impactful applications of AI motivated by his experience developing systems in user organizations, including AI/ML for structured and linked data, biosurveillance, transfer learning, open-world AI, knowledge management, lifelong learning for single and multiple agents, physics of AI, and game theory applications of AI. He was also a Technical Fellow at Leidos/SAIC, a program manager at IARPA, and a senior science advisor at NGA. He has served as the AAAI Secretary-Treasurer, Chair and long-time member of the AAAI Innovative Applications of AI (IAAI) Program Committee, KDD Applied Data Science Program Chair (3 times) and KDD Conference General Chair, and has received the Distinguished Service Award from both AAAI and SIGKDD as well as the Office of the Secretary of Defense Exceptional Public Service Medal, the DARPA Meritorious Public Service Medal, and the Federal Technology Leadership Award.
The lecture is free and open to the public. This series is a collaboration among deans, faculty, and graduate students from the UMass Amherst College of Social and Behavioral Sciences, the Isenberg School of Management, and the Manning College of Information and Computer Sciences.