The Rise of AI Challenges in Finance

TLDR: Generative AI is playing an increasingly important role in the financial services sector, with applications in consumer interactions, risk assessment, and more. However, this technology also presents challenges such as the potential spread of incorrect financial information, security breaches, and a digital divide between different economies. Banks and financial institutions are working to mitigate these risks and establish regulatory frameworks. Generative AI is driving the adoption of banking as a service (BaaS) and embedded finance, and its applications extend to areas like environmental, social, and governance initiatives. In the UK, generative AI is gaining traction but faces challenges related to business models, workforce capabilities, and integration into existing frameworks. Despite these challenges, many institutions feel equipped to accommodate generative AI within their risk management strategies.