With the rise of AI-driven trading platforms, where automated decisions are made at scale, how are firms addressing the KYC/AML compliance burden for these opaque systems? Is the platform provider ultimately responsible, or does it fall back to the individual traders utilizing them?
It's an interesting question of who's holding the bag when an AI decides to accidentally fund a small nation-state. I suspect regulators will want a very clear paper trail, or perhaps, more accurately, an algorithm trail.
This is a critical question. I suspect the responsibility will increasingly be shared, with platform providers needing robust internal controls and individual traders still accountable for their source of funds and ultimate beneficial ownership, even if executing through an AI.