AI IN FINANCIAL SERVICES: AIR SENIOR ADVISOR CHRISTOPHER CALABIA
AI IN FINANCIAL SERVICES: AIR SENIOR ADVISOR CHRISTOPHER CALABIA
July 01, 2024
Generative AI is taking the world by storm. In my long career, I’ve never seen a technology development that hit the priority list of every leader, across virtually every business and government function, across every sector, all at the same time. Within just a few months in late 2022 and early 2023, everyone got the same wakeup call: this new AI is going to change everything….and fast. Not instantly, of course, and obviously there’s plenty of hype and hyperbole about it, but still — this technology is being adopted faster than anything, ever before, in the history of the world.
My guest today is a key part of AIR’s work on how AI will change the financial world. He is Christopher Calabia, who is Head of the Central Bank Digital Currency Program at MIT’s Digital Currency Initiative. Chris is also a Senior Advisor to AIR, and is the author of AIR’s new white paper on AI.
And please take note: Chris’ paper kicks off a larger Call for Papers from AIR, seeking submissions on AI topics that impact financial services and financial regulation. Please come to the show notes or to www.regulationinnovation.org for information on how to participate.
In today’s show, Chris and I talk through the insights he shares in the inaugural paper. As the title suggests, we look at both the upside and the downside — the optimistic and pessimistic scenarios — since both are realistic, and actually, compelling. In my years of working on tech innovation, I’ve learned that all innovation carries this trait, of bringing problems along with solutions. Rarely, though, have we seen a technology that has so much potential to do good and do harm, at the same time. Chris and I talk about all (or at least a whole lot!) of the things that can go wrong, in consumer protection, financial health, fraud and money laundering, market manipulation, and the challenges facing financial regulators. We also talk about the potential to use AI to solve these same problems — even the chance to make both finance and financial regulation work better than they ever have before.
Chris is uniquely positioned to write this seminal paper. He was previously a bank regulator, at the Federal Reserve Bank of New York, which is how I met him years ago. He went from there to the Bill and Melinda Gates Foundation, working on global financial inclusion, including the important Gates paper on the future of the central bank. His next step was to become the head of the Dubai Financial Services Authority, and now he is at MIT, working on Central Bank Digital Currency (CBDC). Along the way he’s also led major projects at the Bank for International Settlements and the International Monetary Fund. All together, he brings an extraordinary breadth and depth of perspectives to thinking about what’s ahead in AI.
Chris’ AI paper, and the Call for Papers, are part of AIR’s multi-year initiative on Financial Regulation in the Age of AI. We have been running an online learning series on NextGenAI and the Future of Financial Oversight and Consumer Protection, which includes a series of webinars and online forums. These are free and most are open to everyone, so please come and check them out. We are also planning a TechSprint on payment fraud in West Africa, aligned with our four-year initiative on consumer financial protection in emerging markets.
A final word: We recently celebrated AIR’s 5-year anniversary. We’ve made a lot of headway since launching in the spring of 2019. If you’re a follower (and maybe even a fan), of our work, we would welcome a contribution. We are a U.S.- based not-for-profit organization (structured as a 501c3, with gifts fully deductible under U.S. tax laws). We are funded almost entirely through donations. If you want to help, you can provide support here, and we will be extremely grateful.
We’re all going to be spending the coming years building the AI future, together. I know you will enjoy my conversation with Chris Calabia.
Chris is a Senior Advisor to AIR. Inspired by a three-decade-long career in central banking, regulatory policy, and international development, Chris Calabia is enthusiastic about AIR’s mission to promote the responsible use of technology for the public good. He has held leadership roles at the Federal Reserve Bank of New York, where he was a Senior Vice President, and at the Dubai Financial Services Authority, where he was Chief Executive. At the Bill & Melinda Gates Foundation, Chris supported policy and technology innovations to expand access to financial services among unbanked or underserved groups, such as underserved women and people living in impoverished or rural areas, focusing on sub-Saharan Africa and South Asia. Earlier in his career, he was seconded to the Basel Committee on Banking Supervision at the Bank for International Settlements. He later co-led the International Monetary Fund’s evaluation of banking supervision in the United Kingdom (2016) and Kazakhstan (2024).
Chris is a Certified Anti-Money Laundering Specialist, a graduate of the Fletcher School of Law & Diplomacy at Tufts University (MALD), and a Phi Beta Kappa graduate of the University of Virginia (BA). He is currently Head of Central Bank Digital Currency Programs at the Massachusetts Institute of Technology (MIT) Digital Currency Initiative. Chris founded FC Calabia Solutions LLC to promote a financial system that is sustainable, resilient, and inclusive.
More for our Listeners
We have wonderful guests coming up. We have a really important show coming soon with former U.S. GSA Commissioner Sonny Hashmi, on how to modernize government technology, absolutely loaded with insight and ideas on how regulatory bodies, themselves, need to commit to overhauling their own technology. (Note that AIR will soon be issuing a white paper on this topic by Nick Cook.) We also have a fantastic show with Penny Lee, President and CEO of the Financial Technology Association.
This is a busy season for AIR. We were honored to receive the Regtech Rockstar award from RegTech Africa in Lagos, Nigeria. I was able to catch up with many of you this month at the EMERGE conference, where we celebrated the 20th anniversary of the Financial Health Network. I’m so proud to see this amazing milestone by Jenn Tescher and her team – especially since I chaired their board for a number of years. I also participated on a wonderful Brookings Institution AI panel with Nicol Turner Lee, Keith Toney, and Jon Fortt on AI risks and opportunities in financial services.
I spoke earlier this month at the Exchequer Club in Washington, DC, sponsored by Women in Housing and Finance. In July I’ll be moderating a panel sponsored by Aspen, and in August I hope to see many of you at FinTech South.
Please be sure to leave us a five-star rating on your favorite podcast platform so more people can find Barefoot Innovation, and please also find me on social media to continue the conversation!
