The EU AI act and its impact on the Maltese compliance banking sector

Abstract

Artificial Intelligence is gaining power by the second and with the introduction of the EU AI Act (Regulation (EU) 2024/1689), the goal of introducing harmonization, trust and transparency with the use of AI throughout Europe was planned. The regulation is looking to further implement a set of risk-based rules split into Unacceptable, high, limited and minimal risk, for developers and deployers regarding the use of Artificial Intelligence. This study seeks out to focus on how banks operating in Malta, altered and adapted to the EU AI Act with specific emphasis placed on the compliance sector within these banks. The general thoughts of professionals operating within this industry is specifically needed due to the ever growing uses of AI within said sector as well as what problems they are facing or might face due to the ever growing list of regulations said sector will be facing with regards to use of AI. Furthermore, the professionals selected for this study, were interviewed through an extensive 30 minute interview with multiple questions and the thoughts generally varied quite dramatically. These interviews were analysed through thematic analysis and split into various themes in order to be analysed accordingly and efficiently. The need for more efficient and educated use regarding Artificial intelligence based tools must be promoted within Maltese banks in order to keep up with the times, failure to adhere to such an Act will lead to serious fines and despite the overall thoughts on the Act and Artificial Intelligence from the participants is positive, the results show that various banks operate and treat AI differently through the use of policies implemented. The need for harmonization and collaboration within the industry must be promoted even further.