Germany's financial watchdog to monitor AI use at banks and insurers

FRANKFURT, July 29 (Reuters) - Germany's financial regulator Bafin said on Wednesday that it will begin overseeing the use of artificial intelligence at the country's banks and insurers after an expansion of its powers by legislators.

• Bafin's expanded powers stem from legislation that came into force on Wednesday.

• It will be allowed to order fines as it aims to protect fundamental rights.

• The watchdog said it would monitor compliance with transparency regarding companies' use of chatbots with customers, as well as risky AI systems like those that measure creditworthiness.

• It will also ensure that financial firms don't turn to prohibited AI practices, including the collection and analysis of sensitive information about people that could lead to them being unfairly disadvantaged.

• "People have to be able to trust that their fundamental rights will be protected when AI is used. Bafin will ensure, for example, that everyone has fair access to financial services and that no one is discriminated against as a result of AI," said Bafin President Mark Branson.

(Reporting by Tom Sims, editing by Thomas Seythal)