The rise of artificial intelligence (AI) in banking is a double-edged sword, according to European banking executives. While AI offers exciting possibilities for fraud detection, customer service, and more, it also increases reliance on a small number of powerful tech companies.
Executives worry that the immense computing power required for advanced AI development will force banks to rely heavily on Big Tech giants like Microsoft, Google, and Amazon. This “vendor lock-in” could limit banks’ flexibility and pose a risk if a major tech company experiences technical issues.
Regulation is also a concern. European regulators are wary of the potential for a single point of failure within the financial system due to overdependence on Big Tech cloud services.
Despite the risks, the potential benefits of AI are undeniable. Banks are exploring AI applications such as chatbots for customer service and advanced financial analysis tools. As AI technology continues to evolve, European banks will need to navigate the opportunities and challenges associated with this powerful tool.
Source: Reuters