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By Oriane KAESMANN, Research Manager the LHoFT
The rapid evolution of artificial intelligence (AI) and other technologies is revolutionising the banking industry, presenting both new opportunities and significant risks. AI and machine learning (ML) are being used in credit underwriting, fraud detection, and customer service, enhancing efficiency and risk management. However, these technologies bring strategic challenges, such as competition from fintech, operational challenges with legacy systems, and reputational risks from potentially unfair outcomes.
Regulatory bodies, like the Basel Committee on Banking Supervision, are evolving frameworks to ensure responsible innovation. Initiatives such as the EU’s Digital Operational Resilience Act(1)...
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