European banking executives express worries that the rise in artificial intelligence will make banks more reliant on large US tech companies, posing new risks to the sector.
Since the release of OpenAI’s popular chatbot ChatGPT in late 2022, banks have been exploring ways to implement generative AI, which has sparked a great deal of excitement about the application of artificial intelligence (AI) in financial services.
AI is already widely utilized for identifying fraud and money laundering.
However, several expressed worries that banks will become even more dependent on a limited number of tech suppliers due to the amount of processing power required to build AI capabilities during a meeting of fintech executives this week in Amsterdam.
Bahadir Yilmaz, chief analytics officer of ING and oversees the Dutch bank’s AI efforts, said he anticipated relying on Big Tech firms “more and more going forward” for infrastructure and machines.
Laptops 1000“You will always require them since these technologies occasionally require extremely high machine power. Additionally, building this technology is not viable for a bank,” he stated.
According to ING’s Yilmaz, banks’ reliance on a limited number of IT firms is “one of the biggest risks.” He emphasized that European banks in particular needed to make sure they could switch between alternative tech providers and prevent “vendor lock-in.”
Last year, the British government suggested regulations to control how many financial corporations depend on outside technology giants like Amazon, Microsoft, Google, IBM, and IBM.
Authorities are concerned that issues at one cloud computing provider can cause numerous financial institutions’ services to go down.
“The only sensible way to obtain computing power for AI is through Big Tech,” Joanne Hannaford, who oversees technology strategy at Deutsche Bank’s corporate bank, told an audience at the Money20/20 conference earlier this week. “AI requires huge amounts of computing.”
