Introduction
In 2025 [1] [3], broker-dealers affiliated with the Financial Industry Regulatory Authority (FINRA) will encounter both opportunities and challenges as generative artificial intelligence (Gen AI) tools become more prevalent in the financial services industry. These tools offer significant benefits in data analysis and market research but also introduce various risks that require careful management.
Description
In 2025 [1] [3], broker-dealers affiliated with the Financial Industry Regulatory Authority (FINRA) will face both opportunities and challenges as generative artificial intelligence (Gen AI) tools become increasingly prevalent in the financial services industry. These tools facilitate the efficient analysis and synthesis of extensive financial and market data [1] [3], enhancing educational resources for investors and providing tailored market research [1] [3]. However, the adoption of these technologies also introduces various risks that require careful management, including concerns related to accuracy, bias [2], data privacy [1] [3], cybersecurity threats [2], and the potential for cybercriminals to exploit Gen AI to enhance their activities [4].
Despite advancements in technology [1] [3], FINRA maintains that its rules and guidance remain technology neutral [1] [3], meaning that existing regulatory obligations must still be met [3]. For instance [3], FINRA Rule 2210 mandates that all communications with the public adhere to principles of fair dealing and good faith [1] [3], ensuring that they are fair [3], balanced [3], and free from false or misleading statements [3], regardless of whether the content is generated by humans or AI [1] [3]. In June 2024 [2], FINRA reiterated this stance in Regulatory Notice 24-09, emphasizing the necessity for firms to conduct thorough assessments of AI tools prior to implementation and to ensure compliance with regulatory standards when utilizing Gen AI and large language models (LLMs).
The integration of AI tools will impact nearly all aspects of a member firm’s regulatory responsibilities [1], necessitating ongoing diligence in navigating an increasingly complex regulatory environment [1] [3]. Firms leveraging Gen AI should implement robust supervision strategies [2], including comprehensive monitoring and data capture practices across all business platforms [4], to ensure compliance and mitigate risks associated with evolving communication methods [4]. Additionally, firms must remain vigilant in managing the cybersecurity risks associated with AI-enabled threats [2], including potential data breaches [2], and ensure that third-party AI solution vendors comply with regulatory standards [2]. As AI technology continues to evolve, the importance of adhering to regulatory obligations while addressing these emerging challenges will be paramount.
Conclusion
The integration of Gen AI tools in the financial services industry presents both opportunities and challenges for FINRA-affiliated broker-dealers. While these tools enhance data analysis and market research capabilities, they also necessitate careful management of associated risks. Adhering to regulatory obligations and implementing robust supervision strategies will be crucial in navigating the evolving landscape and ensuring compliance in an increasingly complex regulatory environment.
References
[1] https://www.lexology.com/library/detail.aspx?g=ff676381-1847-4db8-8180-9a4a4c5f81d7
[2] https://www.acaglobal.com/insights/2025-finra-annual-regulatory-oversight-report
[3] https://www.jdsupra.com/legalnews/ai-trends-for-2025-regulatory-5514841/
[4] https://www.globalrelay.com/resources/webinars-and-videos/regulatory-wrap-episode-51-finras-2025-regulatory-report-what-firms-need-to-know/
