Hogan Lovells 2024-2025 AI Trends Guide - Flipbook - Page 28
AI regulation in financial services in the
EU and the UK: Governance and riskmanagement
The availability of Big Data, cloud-based hosting services, opensource AI software, and enhanced infrastructure, such as the
graphic processing units (GPUs), to train and develop more
sophisticated AI systems all have contributed to the rising adoption
of AI in the financial services sector. Financial institutions and
FinTech are either developing their own AI technology or relying on
AI third party vendors for AI solutions.
AI has started to transform business models of financial institutions.
Service providers have started to offer AI as a Service (AIaaS), which
is a cloud-based service AI outsourcing offering, and financial
institutions are integrating AI and ML solutions into their supply
chain. More financial institutions are structuring their business
models as not just simply B2B or B2C, but to B2B2C or B2B2B,
frequently acting as an intermediary that procures AI solutions from
third parties and offering them to their clients as part of a bundled
product package. Some common uses of AI/ML technology by
financial institutions include: Chatbots, robo-advisors, fraud and
money laundering detection for the purpose of AML and KYC checks,
assessing creditworthiness and affordability, and evaluating insurance
risk. These services facilitated through AI and machine learning allow
financial institutions to offer tailored and diverse products to their
customers at a cost-efficient manner.
Additional
resources
Spotlight
Tool
Digital Trust Whitepaper
Digital Assets and
Blockchain Hub
Authors
Liz Boison
Partner
Washington, D.C.
John Salmon
Partner
London
Leo von Gerlach
Partner
Hamburg & Frankfurt
Daniel Lee
Associate
London
