In the first report of the series, we examine the
financial services industry by consulting with industry leaders, risk managers, challengers and regulators.
It's not magic: Weighing the risks of AI in financial services
Published by the Centre for the Study of Financial Innovation, with support from Swiss Re and Endava
AI is transforming financial services in fundamental ways and has many potential benefits, both in terms of efficiency and new capabilities. But there is nothing magical about it – and anyone who expects magic will be disappointed. In coming years, it will be increasingly common for financial practitioners to work alongside AI technologies. It is crucial that they – and particularly decision-makers – are able to critically evaluate these technologies. Increased reliance on AI will have consequences for consumers, institutions and the stability of the financial system, for better or worse.
Outcomes ultimately depend upon humans, not machines. A decade after the global financial crisis, the world is still grappling with the ramifications of the industry’s embrace of complex financial instruments. Any comparisons to be made with the impact of AI are speculative, but the parallels should not be dismissed out of hand.
This report has two objectives: