This semi-monthly column highlights news, government documents, industry white papers, academic papers and speeches on the subject of AI’s fast paced impact on the banking and finance sectors. The chronological links provided are to the primary sources, and as available, indicate links to alternate free versions.

NEWS:

Forbes, December 31, 2023. The (Very) Emerging Role Of AI In The Accounting Industry. The profession’s biggest firms – like EY and PwC – are deploying AI technology in their auditing and financial review procedures in order to identify irregular transactions or patterns of inconsistency. The technology could ultimately be used to perform a much deeper level of auditing analysis that can offer both investors and financial statement readers a more accurate and complete picture of a company’s finances and at a more affordable cost. Accounting software provider SAP recently released its AI assistant called Joule which promises – like Microsoft Copilot and similar offerings from Salesforce – to “provide customers with contextualized information and assistance when performing tasks in SAP applications.” SAP is already building an AI foundation layer with Joule sitting on top in order to help customers do things like create job descriptions and interview questions as well as analyze financial data, forecast sales trends and help with decision making.

FT.com, December 29, 2023. EU competition chief defends Artificial Intelligence Act after Macron’s attack

The Financial Express. December 31, 2023. Supporting regulatory framework needed to harness benefits of AI: RBI DG. Reserve Bank of India Deputy Governor M Rajeshwar Rao has made a case for a supportive regulatory framework to harness benefits of Artificial Intelligence (AI) while remaining mindful of its potential adverse impacts on the financial system. Speaking at the 106th Annual Conference of Indian Economic Association in Delhi on December 22, Rao said the emergence of Artificial Intelligence, or AI, is also being cited as being in the same league and proponents of AI sound convinced that it is going to transform the future. In the financial sector, he said, “We are seeing several banks and non-banks experimenting with AI. Global experience, so far, however, suggests that such deployment is mostly limited to back-office work and optimisation of business processes to deliver efficiency gains.” Some of the banks have also deployed AI solution to manage compliance requirements, which are routine, for identification of patterns in transactions or payments to detect money laundering attempts or for facilitating cross-border transactions and settlements, he said.

Bank Think. American Banker. December 29, 2023. Big banks are afraid of open banking. That’s a good thing. “If successful, the [CFPB’s] new [open-banking] rule will help bring a healthy level of fear to big banks — the kind that all businesses feel when new entrants, and consumers, can flourish,” composes Rory Van Loo, a Boston University law teacher. In the digital age, it must be simple for customers to change savings account to make the most of greater rate of interest. By now, we ought to likewise have effective expert system assistants to assist us discover the very best charge card and loans.  Instead, over 90 million Americans have actually never ever changed savings account. And over half of all property buyers get just one home mortgage quote.

Digital Journal. December 28, 2023. The AI advantage: How artificial intelligence is revolutionising commercial finance. Artificial intelligence (AI) is seemingly everywhere, and the financial services sector is no different. Banks and other financial firms like hedge funds were some of the first institutions to adopt artificial intelligence at a corporate level, while new technological advances and applications mean that AI usage is more widespread than ever. These new applications promise a myriad of benefits for the firms that adopt AI and their customers, who are interacting with the technology in new ways and opening the door to further possibilities. But how exactly is AI being used to transform the world of commercial finance? Anglo Scottish Finance has provided an overview for Digital Journal.

The New York Times, Dealbook. December 27, 2023. What’s Next in Artificial Intelligence? If 2023 was the year of A.I. awakening, 2024 could be the year of A.I. reckoning. If 2023 was the year the world woke up to A.I., 2024 might be the year in which its legal and technical limits will be tested, and perhaps breached. DealBook spoke with A.I. experts about the real-world effects of this shift and what to expect next year.

Bankrate. December 26, 2023. Using generative artificial intelligence as a financial tool. About 80 percent of Americans didn’t increase their emergency savings this year, according to a recent Bankrate survey. Nearly one-third of households (32 percent) have less emergency savings now than at the start of 2023. Generative AI has emerged as a useful tool for financial advice, offering consumers a free way to receive customized guidance on everything from creating a budget to managing an investment portfolio.

IMF. Rebalancing AI. December 2023. The drive toward automation is perilous—to support shared prosperity, AI must complement workers, not replace them. We must recognize that there is no singular, inevitable path of development for new technology. And, assuming that the goal is to sustainably improve economic outcomes for more people, what policies would put AI development on the right path, with greater focus on enhancing what all workers can do?