The AI revolution - what's next for the financial services industry?

By Gina Delgado

From chatbots and robo-advisors to automated mortgage underwriting and identity verification biometrics, there is no doubt that AI is transforming how individuals, industries and organisations operate¹. Interestingly though, the rapid adoption of AI technologies in New Zealand financial organisations occurs in an unregulated environment.

As competition drives organisations to improve efficiency in the face of financial pressures, they are finding AI can provide multiple potential benefits for internal processes and oversight, including:

• Optimization of customer experiences through AI-enhanced communication interfaces.
• Enhancing regulatory compliance through easier monitoring and prompt response to applicable regulatory changes.
• Enhancing organisations' ability to leverage the large volumes of data generated in day-to-day business activities, enabling organisations to identify trends, make predictions, automate processes and minimise human error.
• Enabling real-time fraud prevention for anti-money laundering purposes by identifying and analysing regular activity patterns in contrast to suspicious trends or behaviours.
• Offering streamlined and more efficient methods for monitoring conflicts of interest, market misconduct and trade surveillance, assisting in enhancing market integrity and protecting organisations' reputation.
• Complementing existing manual processes and procedures to improve oversight and compliance.

However, just as AI can benefit organisations, it carries significant risks that must be considered carefully. Multiple industry papers² ³  have raised concerns associated with the use of AI. These include: