March 4, 2024

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Artificial Intelligence is likely to be adopted in the coming years across all major industry sectors, but its the banking industry that analysts believe has the most to gain.

While banks are likely less attractive places of employment for AI technologists than developers such as Amazon.com Inc AMZN or OpenAI, financial services companies are already partnering with these developers to leverage the technology in applications such as risk management, portfolio monitoring and regulatory compliance.

Technology budgets are rising in 2019 JPMorgan Chase & Co JPM dedicated $11.4 billion to research how AI can eradicate financial crime, improve client experience and securely manage data, among other areas.

Others, such as Bank of America BAC and Wells Fargo WFC have launched chatbots to provide mobile customer services.

The banking sectors readiness for Generative AI is evident in its sustained digitization, large, customer-facing workforces and strict regulatory environment, said Dimitrios Papanastasiou, lead author of a report by Moodys Analytics.

Banks are beginning to tap into the potential of GenAI for frontline and back-office operations, analytics, data creation, customer servicing and software development activities.

Also Read: Big Banks Collaborate With IBM On Quantum ComputingMuch Research Is Still Needed

Indeed, the banking industry isnt stopping at AI. It is also putting considerable resources into all areas of fintech, including taking the first steps into quantum computing as cloud infrastructure improves. Here, IBM IBM is partnering with a number of banks including Goldman Sachs GS and JPMorgan to research potential commercial applications.

According to Moodys Analytics, the possibilities are vast for enhancing current solutions using GenAI. But theres still much research to be done particularly in an industry that is so strictly regulated.

For example, could the efficiency gains be offset by the high costs of deploying the required architecture? And would automated functions continue to necessitate extensive and expensive human oversight?Loading… Loading… Loading…

The results so far are encouraging, but further evidence is needed to ensure robust, accurate and unbiased input in the decision making, said Papanastasiou. And one of the most significant challenges would be to ensure the ethical and responsible use of this technology.Does AI Need Regulating?

This latter point is underlined by recent activity by a number of countries in providing guidelines on the development of AI technology.

On Monday, 18 nations signed an agreement on recommendations for secure by design development of the technology, while some countries have even discussed providing a stricter regulatory framework.

With its access to peoples money and vast archives of personal data, the banking industry has to ensure top priority to the safe deployment of any new technology. But, it is possible that GenAI will prove to be one of the transforming moments in cybersecurity.

Now Read: Artificial Intelligence: 18 Countries Sign Secure By Design Agreement

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