UK Finance reports on impact of AI in financial services

UK Finance has published a report that looks at the uses of AI in the financial sector.

The report covers:

  • how and where AI is being deployed;
  • where there is promise for the future;
  • how to make more of opportunities;
  • risks and mitigation; and
  • the policy landscape.

90% of respondents to UK Finance’s survey of 23 member firms say they were already leveraging Predictive AI in back-office functions, and more than 60% believed Generative AI has the potential to bring significant costs savings and to improve operational effectiveness.  Predictive AI is used most significantly in fraud detection, risk modelling and KYC. Areas for greatest likely future use of Generative AI are process automation, sales and customer service functions. Respondents noted the need to re-evaluate business processes, employee skills and staffing considerations as well as the sustainability impact of the systems needed to cope with the volumes of information. Many projects are at proof-of-concept stage, yet 65% of respondents worry about the direction of regulation when considering adopting AI – despite the UK’s flexible regulatory approach being technology-neutral.  They are concerned about lack of control over data and bad consumer outcomes, and reliance on third parties.

The report looks at the functions and uses of both Predictive and Generative AI, and their limitations. It looks at the potential for fraudsters to use AI, and what mitigation measures could be put in place, and includes case studies on current tools.

In terms of regulation, the report compares the UK stance with that of the EU and other major jurisdictions such as the US and Singapore, and includes a list of all current relevant regulatory materials.

Emma Radmore