Name in original language
בינה מלאכותית בסקטור הפיננסי - דו"ח ביניים להערות הציבור
Initiative overview
Israel’s artificial intelligence initiative in the financial sector is a forward-looking effort to harness the potential of AI while ensuring responsible and fair use. The initiative responds to the growing interest in AI applications across banking, insurance, credit, and investment services, where the technology offers opportunities to improve efficiency, reduce operational costs, enhance access to financial services, and promote innovation. At the same time, it addresses significant risks, including algorithmic bias, lack of transparency (the “black box” problem), privacy concerns, cyber threats, and the potential for market concentration or financial instability. These challenges demand a careful and tailored approach to regulation that neither stifles innovation nor compromises consumer protection or market integrity.
The key objectives of the initiative are to promote safe AI integration in financial services, ensure consumer rights and data privacy, and maintain public trust in digital finance. Led by an inter-agency task force of financial regulators, the initiative encourages a flexible, risk-based regulatory framework that adapts to the level of risk posed by specific AI applications. It emphasizes technological neutrality, proportional regulation, and alignment with global standards while advancing innovation through mechanisms like regulatory sandboxes, innovation hubs, and improved access to anonymized data. Consumer-facing protections—such as explainability of AI decisions, human oversight in critical processes, and clear disclosures about AI use—are prioritized to safeguard fairness and accountability.
The initiative is expected to evolve through continued public consultation, refinement of regulatory principles, and the gradual development of sector-specific rules. While Israel does not currently adopt a single, sweeping AI law, the initiative encourages updates to existing financial regulations and policies to accommodate AI-driven services. Institutionalization will occur through regulator-issued guidelines, inter-agency coordination, and the integration of AI governance and risk management practices across financial institutions. Efforts to monitor systemic risks, such as over-reliance on third-party AI providers or disinformation threats, are also part of the long-term implementation plan.
The initiative aims to scale through broader adoption of AI tools, supported by clear, consistent oversight and continuous evaluation. Since its inception, the initiative has moved from conceptual discussion to structured planning, producing two key policy documents that assess both current challenges and future needs. These reports reflect the government’s commitment to balancing technological progress with social responsibility. As AI adoption increases, the initiative’s principles and tools will be revisited and updated to ensure a competitive, inclusive, and resilient financial sector.
