The Evolution of AI in the Financial Services Industry

The financial services industry has been abuzz with discussions surrounding Generative AI, particularly following the release of OpenAI’s ChatGPT a year ago. It is evident that while Generative AI is a significant consideration, it represents just a fraction of the broader AI adoption within the industry.

Conversations at The AI Summit NY underscored the significance of responsibly utilizing AI to drive cost reductions, enhance efficiencies, address bias and discrimination, and comprehend the implications of regulations such as the EU AI Act.

A primary concern within the industry is the mitigation of biases and discrimination in lending decisions. Dr. Paul Dongha, Group Head of Data & AI Ethics at Lloyds Banking Group, underscored the critical nature of integrating ethics across the entire data science lifecycle. He stressed the importance of diversity within product teams and the utilization of frameworks that integrate checkpoints in the data lifecycle.

Rashida Richardson, Senior Counsel, Privacy and Data Protection, Artificial Intelligence at Mastercard, shed light on Mastercard’s deployment of AI for risk scoring, fraud detection, money laundering, and vulnerability detection. She emphasized the strategic implementation of AI, with leadership support being essential for success.

Jessica Peretta, Senior Vice President of Network Behavior Management at Mastercard, also emphasized the significance of starting off with small-scale AI implementations, as they require substantial infrastructure, support, and expertise.

In discussing the challenges of AI, Richardson highlighted that AI is not a uniform entity. Different AI models pose their own unique set of risks and benefits. It is imperative to establish governance practices to effectively balance these risks.

During the Q&A session, the query of whether Generative AI represents a new breed or a new species arose, to which Peretta responded that it is a new breed, not a new species.

Overall, as the financial services sector continues to explore the potential of AI, it is evident that responsible implementation and governance will be crucial in navigating challenges and realizing the benefits of AI technology.