Regulators are beginning to teach robots who's the boss.

After spending billions of dollars on cutting-edge artificial intelligence (AI) technologies, Europe's banks and insurers face tougher scrutiny of the tools they use to help root out fraud, check borrowers' creditworthiness, and automate claims decisions. European Union rules starting this week will stress human oversight and consumer protection, which may hamper companies trying to build the tools of the future.

“Companies developing AI technologies will have to consider and embed the data protection issues into the design process,” David Martin, senior legal officer at Brussels-based consumer advocate BEUC, said in an interview. “It's not something where they can just tick a box at the end.”

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