Artificial intelligence (AI) emerges as a pivotal force set to revolutionise the global banking sector, potentially boosting profits by USD 170 billion or 9 per cent by 2028, according to a report by CITI.
Termed as the General-purpose Technology (GPT) of the 2020s-2030s, AI's transformative impact on finance is poised to reshape operations, enhance security measures, and redefine intellectual property landscapes worldwide.
One of the most compelling aspects highlighted in the report is AI's role in combating financial fraud. AI-generated insights hold the key to preventing real-time payment scams, such as the pervasive Authorized Push Payment (APP) fraud.
In the UK alone, APP fraud accounts for 40 per cent of banking fraud losses, with projected costs soaring to USD 5.25 billion across the US, UK, and India by 2026 if unchecked.
While countries like the European Union, China, and Singapore have emerged as early adopters of AI regulation in finance, the United States has taken a cautious approach, lagging behind in regulatory initiatives.
India, on the other hand, has shown a fluctuating stance on AI governance. Initially adopting a non-regulatory position in early 2023, India swiftly pivoted to considering comprehensive AI laws by mid-2024, albeit amid evolving directives and advisories.
Regarding economic impact, AI promises substantial gains in developer productivity, potentially boosting efficiency by 10-50 per cent and translating into annual savings ranging from USD 2 to USD 16 billion in the US banking sector alone.
This efficiency gain is underpinned by advancements in AI-driven software solutions, which optimize tasks traditionally handled by technology staff.
The report underscores the broader implications of AI as a GPT, likening its potential to the industrial revolution's steam engine and the internet age's transformative power.
By commoditising human intelligence through enhanced analytical capabilities, decision-making processes, and content creation, AI stands poised to usher in a new era of economic growth while simultaneously disrupting existing norms and industries.
As financial institutions worldwide navigate the AI revolution, adapting to technological advancements and regulatory landscapes will prove pivotal in harnessing AI's full potential while safeguarding against potential pitfalls.
With AI poised to redefine finance and money in the coming decade, stakeholders across sectors are called upon to engage proactively in shaping its ethical, legal, and economic implications for a more inclusive and sustainable future. (ANI)
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