Banks say growing reliance on Big Tech for AI carries new risks
Artificial intelligence brings great benefits to a wide variety of tasks but potential problems come when AI systems interact directly with human attention. Photo: Bloomberg
The boom in artificial intelligence will increase banks' dependence on big US tech firms, creating new risks for the industry, European banking executives said.
Excitement around using artificial intelligence (AI) in financial services - widely used already for detecting fraud and money-laundering - has soared since the launch of OpenAI's viral chatbot ChatGPT in late 2022 as banks examine ways to deploy generative AI.
But at a gathering of fintech executives in Amsterdam this week, some expressed concerns that the amount of computing power needed to develop AI capabilities would make banks rely even more on small number of tech providers.
ING's, opens new tab chief analytics officer, Bahadir Yilmaz, who is in charge of the Dutch bank's AI work, told Reuters he expected to rely on Big Tech companies "more and more going forward", for infrastructure and machinery.
"You will always need them because sometimes the machine power that is needed for these technologies is huge. It's also not really feasible for a bank to build this tech," he said.
Banks' dependency on a small number of tech companies was "one of the biggest risks", ING's Yilmaz said, emphasising that European banks in particular needed to ensure they could move between different tech providers and avoid what he called "vendor lock-in".
Britain last year proposed rules to regulate financial firms' heavy reliance on external technology companies, such as Microsoft, Google, IBM and Amazon. Regulators are worried that problems at a single cloud computing company could potentially bring down services across many financial institutions.
"AI requires huge amounts of compute and really the only way that you're going to be able to access that compute (computing power) sensibly is from Big Tech," Joanne Hannaford, who leads technology strategy at Deutsche Bank's, opens new tab corporate bank, told an audience at the Money20/20 conference earlier this week.
AI was top of the agenda at the Amsterdam conference.
The CEO of French AI startup Mistral AI, seen as France's answer to OpenAI, told attendees there were "synergies" between its GenAI products and financial services.
"We see a lot of opportunities in creating analysis and monitoring information ... which is really something that bankers like to do," Arthur Mensch said.
ING is testing an AI chatbot currently used for 2.5% of incoming customer service chats. Asked how long it would be until the chatbot could handle half or more of customer service conversations, Yilmaz said within a year.
In its first statement on AI, the European Union's securities watchdog said last week that banks and investment firms cannot shirk boardroom responsibility and have a legal obligation to protect customers when using AI. It warned that the technology is likely to have significant impact on retail investor protection.
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