Executives Warn of Growing Dependence on U.S. Tech Giants Due to AI Boom

by Ivy

European banking executives have sounded a cautionary note, highlighting the potential risks associated with the burgeoning use of artificial intelligence (AI) in the industry. With AI already playing a vital role in detecting fraud and money laundering, excitement has surged following the widespread adoption of OpenAI’s viral chatbot, ChatGPT, in late 2022, prompting banks to explore various applications of generative AI.

However, concerns were raised at a recent gathering of fintech executives in Amsterdam regarding the considerable computing power required to develop AI capabilities. Some executives expressed apprehensions that this reliance on extensive computing resources would further cement banks’ dependence on a limited number of major tech providers.


Bahadir Yilmaz, Chief Analytics Officer at ING, emphasized the inevitability of banks increasingly relying on Big Tech companies for infrastructure and machinery. Yilmaz underscored the challenge for European banks, stressing the need to ensure flexibility in tech partnerships to avoid “vendor lock-in,” which he identified as one of the industry’s significant risks.


To address the escalating reliance on external technology companies, Britain proposed regulations last year to regulate financial firms’ heavy dependency on tech giants like Microsoft, Google, IBM, and Amazon. Regulators fear that disruptions at a single cloud computing company could have cascading effects across numerous financial institutions.


Joanne Hannaford, who leads technology strategy at Deutsche Bank’s corporate bank, echoed these sentiments, highlighting the necessity of accessing substantial computing power from Big Tech for AI initiatives. AI took center stage at the Amsterdam conference, with Arthur Mensch, CEO of French AI startup Mistral AI, highlighting the synergies between AI products and financial services.


In the realm of customer service, ING is currently testing an AI chatbot, which handles 2.5% of incoming customer service chats. Yilmaz anticipates a significant expansion of the chatbot’s capabilities, aiming for it to manage half or more of customer service conversations within a year.

In a significant development, the European Union’s securities watchdog issued its first statement on AI, emphasizing the importance of boardroom responsibility and customer protection in the use of AI by banks and investment firms. The watchdog cautioned that AI technology could have a profound impact on retail investor protection, signaling a growing regulatory focus on AI governance in the financial sector.

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