AI in Banking and Finance

AI and notably GenAI promise multiple use cases in banks and financial firms, and many financial firms are already actively working on integrating them in various business areas. This development will have far-reaching implications for banks’ and other financial firms’ business, including the form how services are provided, the scale and type of employment in the banking and finance industry, competition among financial service providers and the financial sector’s profitability. The use of GenAI will also have important implications for customers’ user experience. The link between digital literacy and financial inclusion will require particular attention. Financial firms also have to face resulting challenges for data protection across multiple jurisdictions and in line with the upcoming European AI act. At the system level, the spreading of AI may have implications for financial stability, to which financial regulation and supervision will have to respond adequately.