Financial services sector reluctant to adopt AI

Artificial intelligence (AI) has the potential to cut costs, but financial services firms have reportedly been slow to adopt it.

This is according to A. report On Sunday (30 June), the Financial Times (FT) reported that regulatory concerns and fears over job losses were preventing banks from rolling out AI-based products.

“The big banks will do it definitely “We will not implement (the technology) as quickly as any of the FinTechs,” he said Tom Blomfieldco-founder of neobank Monzo and a partner of the group in the startup incubator in Silicon Valley Y Combinator.

He added that generative AI “will make banks more efficient and able to deliver the same products at lower costs.”

The report cites a Capgemini study, which shows that only 6% of retail banks are ready for the widespread implementation of artificial intelligence.

However, the FT also pointed to McKinsey’s estimate that AI could add $340 billion a year to the value of the global banking sector, or about 4.7% of industry revenues. The report said that despite these unexpected benefits, there are concerns that the shift will cost people their jobs.

“People don’t understand that this is a productivity tool,” he said. Nasir ZubairiCEO of FinTech Accelerator Luxembourg House of Financial Technology“They still sincerely believe that it will be so take away their jobs“

It’s not just the financial sector that feels threatened by AI. As we recently discussed here , there are also concerns about its impact on jobs in creative industries.

In anticipation of the potential impact of artificial intelligence, some figures in the music industryincluding artists such as Billie Eilish and Nicki Minaj, have signed an open letter demanding protection against unauthorized use of their songs to train AI models, expressing concerns that unchecked artificial intelligence could devalue their work and deprive artists of fair compensation.

Meanwhile, last week, PYMNTS wrote about the potential of generative AI to reduce expensive burden Payments fraud.

“As this technology develops and becomes more popular, it could become the cornerstone of modern payment fraud prevention strategies, promising to improve accuracy and efficiency AND cost savings,” the report stated.

This excitement is largely due to technology potential to overcome the limitations of traditional fraud detection tools. Its capabilities could complement current methods with real-time identification and neutralization. Payments fraud, that could protect shopping experience and to correct banks and financial results of enterprises.

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