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Exploring the Interplay of Regulation and Technological Advancements in Financial Services
Regulation has historically driven technological advancements in financial services. Regulations and technology are powerful drivers of change in the industry. Effective regulations are essential for ensuring the safety and soundness of the financial system. For example, Dodd-Frank legislation mandated a simulation by the Federal Reserve to assess how banks would perform in adverse scenarios, leading to increased safety measures. Regulators also focused on understanding algorithms in electronic trading to prevent market manipulations. Emphasis on boundary management between technology and the real world is crucial for the effective functioning of algorithms and artificial intelligence in financial services.