Book Review of Driverless Finance

Abstract

Driverless Finance explores the intersection of emerging financial technologies, regulatory policy, and financial stability, unveiling the hidden potential for profound systemic risks inherent in the rapidly evolving sector. Rooted in the American regulatory context, the book argues that while these emerging technologies bring unparalleled innovation, it necessitates a modernized regulatory framework to avert a preventable financial crisis. By highlighting the potential pitfalls in leveraging artificial intelligence and blockchain within existing economic systems, the book provides ample evidence that the risks underlying these technologies are being underestimated and unquantified. While the book’s arguments underscore an urgent need for regulatory scrutiny and offer some innovative suggestions to policymakers like a “Form T,’’ which would require financial service providers to confidentially disclose to supervisors all of the technological systems that they rely upon to deliver financial services, it also invites a broader discussion. It calls for more research into balancing regulation with innovation and understanding how these emerging technologies can be a positive catalyst in the financial system.

Keywords: regulation, innovation, financial crisis, fintech, artificial intelligence, blockchain, regtech, cybersecurity, privacy

JEL Classification: K22, K24