Industry leaders describe reluctance to adopt the technology as its risks outweigh benefits.

Financial services are slow to adopt AI due to regulatory concerns and security risks, despite evidence the technology will boost productivity, according to industry leaders. 

Research conducted by consultancy Kin + Carta has found that only 14 per cent say AI features in their corporate strategy and 26 per cent are still at the very early stages of exploring the technology’s potential. Factors deterring bankers include job loss fears and institutional inertia.

This is despite evidence of benefits to early adoption of the technology. A separate study by Capgemini has found only six per cent of retail banks are prepared to implement AI at scale across their business, despite a recent estimate by McKinsey showing that it could add up to $340bn (£262bn) in value every year to the global banking sector. “Given the critical role banks play in our societies, a cautious approach that prioritises internal efficiencies over customer-facing applications is understandable,” said Philip O’Neill, director of financial services, Europe, at Kin + Carta. “Several operational hurdles also exist to these projects, not least that data remains siloed across various systems.”

He added: “Financial services institutions must prioritise their strategic goals and desired outcomes, then explore how generative AI can contribute as a solution, rather than letting the technology define the problem.”

Hesitancy around AI adoption is unsurprising however, following a report from the Bank for International Settlements outlining the risks of the technology, including giving incorrect information, hacking and misuse of data.