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Artificial intelligence (AI)

 

Artificial intelligence (AI)

Context

AI is considered as the new technology with the highest potential to transform the financial sector in the near future, due to its capacity to add value to practically every step of the value chain, both in terms of productivity and revenue generation. Predictions are that AI will have a major impact in the coming 5 years. At present, AI developments are widespread in the financial sector, but only a limited number of firms currently use AI at scale for multiple activities.

Several obstacles need tackling for ensuring a wider uptake of AI. Access to appropriate data sets and skills to handle large amounts of different data are the main issue currently. Other challenges concern access to AI software, hardware capacity and the capacity to deploy operationally AI models.

The further development of AI in the financial sector also entails certain risks according to regulators. These include accountability and explainability issues, possible bias in data sets, higher exposure to data privacy issues, as well as possible pro-cyclicality and third-party dependency risks.

At present, AI use in finance is largely governed by existing regulations. Commission proposals for increasing AI investments, skills and the trust in AI are currently under consultation, as well as a new data strategy aiming to facilitate data access and sharing across the EU. AI is also part of the topics addressed by the Commission’s upcoming Digital Finance Strategy for Europe.

Contributions to the policy debate

Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)