Smart contracts and artificial intelligence

Abstract

Smart contract technology and artificial intelligence are reshaping the conventional industry and business processes, in particular financial businesses. Being embedded in blockchains, smart contracts allow the contractual terms of an agreement to be enforced automatically, without the intervention of a third party whom the parties trust. As a consequence, smart contracts can limit administration and save costs, increase the efficiency of business processes and lower risks. Smart contracts may drive the new wave of innovation in business processes, though, there are a number of issues to be tackled. Artificial intelligence (AI) techniques are being increasingly deployed in finance, in areas such as algorithmic trading, credit underwriting, finance based on blockchain, or asset management. The deployment of AI in finance is enabled by more and more affordable computer capacity as well as an abundance of available data. Undoubtedly, the digital revolution poses new challenges for humans, in particular the need to create new institutions and legal tools that would be able to keep up with new technologies. Both smart contracts and AI are used in many areas of the economy, more and more recently also in the capital market, causing a number of discussions concerning, in particular, their legal aspects.