This semi-monthly column highlights news, government documents, NGO/IGO papers, conferences, industry white papers and reports, academic papers and speeches, and central bank actions 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:
AI in financial services must be prioritised. Last month the UK Prime Minister Sir Keir Starmer made a commendable effort to boost growth and deliver more efficient services in the UK, as he set out the Government’s AI Action Plan to support the country’s ailing economy. However, while it’s promising to see core services such as the NHS and data centres taking centre stage, it’s disappointing that vital critical industries such as financial services and insurance – one of the most important industries within the UK in terms of economic output – is not being prioritised as part of this plan. This represents a lost opportunity to leverage AI and unlock and supercharge growth in the City of London, given it’s the fourth largest financial services sector amongst OECD nations and contributed £208.2bn to the British economy in 2023. Contrastingly, the lack of emphasis comes after the Chancellor Rachel Reeves returned from a trip to China in which co-operation in key sectors such as financial services was given the red carpet.
4 ways that AI and tech are reshaping finance. Why It Matters. MIT Sloan, February 28, 2025. Generative AI and financial data are opening up the digital economy to more consumers and small businesses, but crypto concerns remain.
BUSINESSNEXT unveils new AI-driven retail banking platform. Retail Banking International. The newest platform features a triple-layer AI system that combines Predictive AI, Generative AI, and Autonomous AI agents.
The Role Of Technology And AI In Superior Asset Finance And Leasing. Forbes, February 28, 2025. – The finance sector has experienced unprecedented change in recent years, especially in asset finance and leasing. This shift in customer preferences has been driven by emerging technologies such as artificial intelligence (AI) and the preferences of younger generations for online and mobile technologies. As a result, finance companies are challenging the traditional banking and financial services sector, finding new ways to do business and meet their customers wherever they are.
How To Train AI To Support Life Insurance And Annuities Distribution. February 25, 2025, In 2023, McKinsey published a report titled “Redefining The Future Of Life Insurance And Annuities Distribution.” The report highlighted a sobering reality: The life insurance industry is facing a perfect storm of challenges, including shifting customer expectations and mounting pressure to digitize. But they also offered a glimmer of hope: AI. The question isn’t whether AI can help—it’s how we can train AI to augment and elevate the role of human insurance and annuity agents. Drawing from my experience as a fintech CEO working with Silicon Valley startups, digital platform leaders and financial services businesses of all sizes, I’ve seen firsthand how AI can unlock growth. Here’s how you can build revenue programs that enhance distribution and accelerate growth by leveraging AI.
DBS reveals how AI deployment will affect its workforce with 4,000 job cuts expected; but also promises recruitment drive. Four thousand roles are to be slashed at one of Asia’s biggest banks over the next three years as AI takes over some of the work. However, the bank – DBS – says that permanent staff won’t be affected and that actually there will be around 1,000 new roles created as it pivots to roll-out the technology. Chief Executive, Piyush Gupta, added that the bank had already been deploying AI for more than 10 years and now uses more than 800 different AI models to fulfil different tasks.
Jobs Being Cut in Banking Industry – Bankers take note: AI could be your next coworker. Bloomberg Intelligence surveyed chief information and technology officers at 93 major banks, including Citigroup, JPMorgan, and Goldman Sachs, in a report released Thursday. The report showed that AI could lead to as many as 200,000 job cuts in the banking industry in the next three to five years. Executives expect to cut an average of about 3% of their overall workforce as AI automates more tasks. Nearly one in four executives said that more jobs than the average could be cut, about 5% to 10% of their total workforce.
GOVERNMENT DOCUMENTS:
The fastest growing industry sector, 2023–33: Professional, scientific, and technical services, February 2025 – Industry data tell us a lot about jobs. We can learn about what types of employers there are, how employment is expected to change, and which occupations in an industry have the highest pay. Look to the U.S. Bureau of Labor Statistics (BLS) for all these data and more. The five charts that follow offer a snapshot of job outlook and wages in professional, scientific, and technical services, the industry sector that BLS projects will have the fastest employment growth over the 2023–33 decade. Industry employment growth – From 2023 to 2033, employment in professional, scientific, and technical services is projected to increase by 10.5 percent, more than double the 4.2-percent growth rate BLS projects for total wage and salary employment. This industry sector includes establishments that provide expertise in accounting, research, information technology (IT), and many other fields. Computer systems design and related services is projected to have the fastest employment growth of industries in this sector, increasing by 19.5 percent from 2023 to 2033. Heightened demand for workers in this industry is expected due to outsourcing of IT functions to specialized firms, increased cybersecurity needs, and continued adoption of advanced technologies, such as artificial intelligence (AI).Chart 1. Employment growth in professional, scientific, and technical services, by industry, projected 2023–33 (percent)
The fastest growing industry sector, 2023–33: Professional, scientific, and technical services Industry data tell us a lot about jobs. We can learn about what types of employers there are, how employment is expected to change, and which occupations in an industry have the highest pay. Look to the U.S. Bureau of Labor Statistics (BLS) for all these data and more. The five charts that follow offer a snapshot of job outlook and wages in professional, scientific, and technical services, the industry sector that BLS projects will have the fastest employment growth over the 2023–33 decade. Industry employment growth From 2023 to 2033, employment in professional, scientific, and technical services is projected to increase by 10.5 percent, more than double the 4.2-percent growth rate BLS projects for total wage and salary employment. This industry sector includes establishments that provide expertise in accounting, research, information technology (IT), and many other fields. Computer systems design and related services is projected to have the fastest employment growth of industries in this sector, increasing by 19.5 percent from 2023 to 2033. Heightened demand for workers in this industry is expected due to outsourcing of IT functions to specialized firms, increased cybersecurity needs, and continued adoption of advanced technologies, such as artificial intelligence (AI).
CORPORATE:
Intelligent Banking: A blueprint for creating value through AI-driven transformation. February 2025. KPMG. This report explores AI’s pivotal role in banking, highlighting its transformative impact and providing insights for leaders at every stage, from initial pilots to scaling initiatives.
Putting AI agents through their paces on general tasks. BIS Working Papers | No 1245 | 21 February 2025 by Fernando Perez-Cruz and Hyun Song Shin. PDF full text – Focus – Artificial intelligence (AI) “agents” that have recently been rolled out can use computers by taking control of the keyboard and mouse. These AI agents can use a computer just like a person would and can receive instructions in English. By end-2025, these AI agents are expected to become commonplace and to change how we work and use the internet. We assessed these AI agents on the general skills needed to play games such as Wordle – recognising when tiles change colour, using feedback to arrive at informed guesses and inputting those guesses using the computer keyboard and mouse.
Artificial intelligence and relationship lending. BIS Working Papers | No 1244 | 19 February 2025 by Leonardo Gambacorta, Fabiana Sabatini and Stefano Schiaffi. PDF full text
The Great Financial Crisis and technological advancements have significantly transformed the banking system. Following the crisis, the banking sector faced compressed interest rate margins, negatively affecting profitability. In response, many banks further reduced traditional bricks-and-mortar branches and invested in data gathering and processing, taking advantage of artificial intelligence (AI) technology. With its enhanced analysis of hard, verifiable and codifiable data, AI can coexist with more traditional methods of reducing asymmetric information between banks and firms, such as acquiring soft information through close relationships between intermediaries and clients.