AI Innovation and Risk Management in the Financial Sector
In the beginning of June, Dr. Galya Mancheva spoke at an event hosted by NDB, addressing the growing impact of AI on Bulgaria’s financial sector, as she outlined how the European Union’s Artificial Intelligence Act offers a critical framework for balancing innovation with responsible risk management.
Dr. Mancheva emphasized that financial institutions have much to gain from AI adoption. The financial sector covers a lot of ground, from automating customer service and enhancing fraud detection to optimizing credit scoring. However, a warning was made that the benefits of AI can only be realized when systems are transparent, explainable, and aligned with legal and ethical standards.
She pointed out that many financial firms still rely on black-box models that risk introducing bias or error, particularly in decisions that affect people’s financial rights. Under the EU AI Act, such high-risk applications will require rigorous documentation, transparency, and accountability measures.
“This is not about slowing innovation. It’s about building trust. AI systems in finance must be safe, fair, and explainable, especially when they affect real lives.”
Dr. Mancheva further noted that the AI Act sets a new compliance benchmark, with potential fines reaching €35 million or 7% of global turnover for violations. But the true cost, she argued, is reputational: companies seen as irresponsible in their AI practices may lose the trust of both clients and regulators. The AI pioneer urges financial institutions to act now, not later, and to treat regulatory readiness as part of their innovation strategy.
