By Elizabeth Howcroft
AMSTERDAM (Reuters) – European bank executives said the rapid growth of artificial intelligence (AI) is making banks more reliant on big U.S. tech companies and raising new risks for the industry.
Excitement for the use of artificial intelligence (AI) in financial services has skyrocketed since the release in late 2022 of OpenAI's buzzy chatbot ChatGPT, already widely used to detect fraud and money laundering, as banks consider how to deploy generative AI.
But at a gathering of fintech executives in Amsterdam this week, some expressed concern that the scale of computing power needed to develop AI capabilities could make banks even more reliant on a small number of technology providers.
Bahadir Yilmaz, chief analytics officer for Dutch bank ING's AI practice, told Reuters that banks would “increasingly” rely on big tech companies for infrastructure and machinery.
“This technology can require a lot of machine power so it will always be needed, and it's not feasible for banks to build it,” he said.
ING's Yilmaz said banks' reliance on a few technology companies was “one of the biggest risks”, stressing that European banks in particular needed to be able to move between different technology providers and avoid so-called “vendor lock-in”.
Britain proposed rules last year to curb financial institutions' over-reliance on outside technology companies such as Microsoft, Google, IBM and Amazon, as regulators worry that problems with one cloud-computing company could cripple many financial institutions.
“AI requires a huge amount of computing power, and the only way to get reasonable access to that computing power is through the big tech companies,” Joan Hannaford, head of technology strategy at Deutsche Bank's corporate bank, told an audience at the Money 20/20 conference earlier this week.
AI was at the top of the agenda at the Amsterdam conference.
The CEO of Mistral AI, a French AI startup seen as France's answer to OpenAI, told attendees there were “synergies” between the company's GenAI products and financial services.
“We see a lot of opportunity in creating analytics and information oversight, which is exactly what bankers like to do,” Arthur Mensch said.
ING is currently testing an AI chatbot that is being used to handle 2.5% of customer service chats, and when asked how long it would take before chatbots could handle more than half of customer service conversations, Yilmaz said within a year.
The European Union's securities regulator issued its first statement on AI last week, saying banks and investment firms cannot avoid the responsibilities of their boards of directors and have a legal obligation to protect customers when using AI. It warned that the technology could have significant implications for protecting retail investors.
(Reporting by Elizabeth Howcroft; Editing by Tommy Reggioli-Wilkes and David Evans)
