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With the boom of artificial intelligence showing no signs of slowing down, a new review has revealed that it is expected to revolutionize the financial sector by 2030.
This comes as the technology continues to be integrated across numerous sectors including the likes of hospitals, education, tech and now, financial.
And this new update could mean some major improvements and changes to the user experience of personal finance services.
In a landmark review, the Financial Conduct Authority (FCA) shared four shifts in the way AI is used that will ‘impact retail financial services’.
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This includes the ‘transformation of firm operations, the evolution of consumer journeys, the reshaping of competition and market power, and the amplification of fraud and cyber risks’.
The executive director of FCA, Sheldon Mills, said: “Artificial intelligence will transform financial services by 2030. It creates significant opportunities for consumers, firms and the wider economy. This report sets out a roadmap for how industry regulators and government can prepare for the next phase of AI-driven change in our world-leading financial services sector.”
Mills went on to say that AI will offer a ‘once-in-a-generation chance to close the information asymmetries and frictions that have long left people making poor financial decisions’.
So, what will the changes look like in real terms? Well, according to the review, this could mean that AI will be able to autonomously set budget goals as well as provide new insight into how people make financial decisions and how the financial market functions.
The report went on to highlight how AI ‘has the potential to improve access, personalization and efficiency’.
However, this new tech doesn’t come without its risks, as concerns have been raised that this introduction also can also amplify safety issues surrounding fraud, cyber security, consumer harm and market concentration.
Ashley Alder, Chair of the FCA, said: “The Board is enormously grateful to Sheldon for the rich, comprehensive report he’s delivered. His work anticipates the fundamental change agentic AI will bring to financial services. It highlights how consumers and firms can reap significant potential benefits as well how risks can be managed.
“As is clear in the report, we need to keep pace with a rapidly changing environment and the principles-based, outcomes focussed approach we’ve taken on AI - relying on the Consumer Duty and Senior Managers Regime - has been critical to us doing so. The recommendations build on work the FCA has been doing - not least allowing firms to test their use of AI with us - and our own use of AI to be a smarter regulator, more efficient and effective.”
