The French president urged Europe to “resynchronise with the rest of the world” on AI. The official declaration coming out of the summit, which mentioned international governance, was even signed by China.

But the US and UK did not sign the official declaration. J.D. Vance, the US vice-president, warned against “excessive regulation”, which could stifle innovation. Broadly speaking the French view is that the technology needs to be “safe, secure and trustworthy”, stressing the need to limit the risks of using AI – while Vance accused world leaders of being too rule-bound and wanting to “strangle” AI.

Whichever side you sit on when it comes to the regulation spat, it’s clear AI-safety concerns and the regulation of this new technology are the focus of a great deal of the news coverage.  And so it should be, it’s an important topic.

As a leader in the use of AI in originations, servicing, and payments, you might expect Target Group to want to be calling for the industry to “cast off the regulatory straitjacket”. You’d be wrong.  While we concede there is an opportunity cost to regulation that might reduce the scope for innovation, our view is that it’s a nuanced topic.

We work in financial services which is already a highly regulated environment. There are risks with poorly trained AI delivering poor outcomes for customers; we understand that when the AI is used in our space, it has to be safe.

So, rather than calling for less regulations, what we would like to see is regulation that is fleeter of foot and catches up with technological advances faster – regulation that evolves faster.  This is still somewhat self-serving.  After all, our clients won’t want to invest in bleeding-edge AI until they have clear regulations surrounding its use.  Given the government’s push for growth through regulation, the FCA should take that seriously.

When it comes to AI rules, our chief concern is the mortgage market understand that regulation (of whatever sort) is here for the long-term. This means any lenders, third-party servicers, or brokers looking to embrace and implement AI need to keep pace with changes in its regulation.

It is a fast-changing field, and we dedicate tremendous resources to keeping pace with it. Fortunately, we are a part of the Tech Mahindra group and have access to the combined talents of 147,000 colleagues worldwide, so we are in a good position to do just that.  We’ve had to.

While AI advances over the course of the last decade have prompted a growing concern that progress in the field is now dangerously rapid, there is no consensus on what should be regulated. Or how. Or by whom. Does the technology itself require rules, or only its applications? What exactly are the risks posed by artificial intelligence?

There are certainly plenty of “AI-doomers” out there (not least Elon Musk) but I’m not all that concerned about a catastrophic Terminator-style war against the machines. I do worry about the threat posed by bias and discrimination with small language models, for instance.

At the moment, the AI ethics camp has the ear of European policymakers, certainly.  By way of example, the EU’s AI Act, the world’s first comprehensive AI legislation, came into force on August 1 last year. It is mostly a product-safety document which regulates applications of the technology according to how risky they are.

That sounds great but the act is extremely strict. A startup offering an AI tutoring service needs to set up risk-management systems, conduct an impact assessment, and undergo an inspection – as well as jumping through other hoops. You can see how easily, without expert guidance, a lender could easily come a cropper there.

As AI continues to reshape the mortgage market, staying ahead of regulatory changes will be crucial for industry players, and partnering with experts will be key to ensuring both innovation and compliance.

Uday Bola is head of solution design at Target Group