This semi-monthly column highlights news, government documents, NGO/IGO papers, 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:
Fortune, January 31, 2024. The fight against greenwashing starts with AI. Here’s why.. Financial services firms are in a prime position to bring clarity in the current scenario. In a 2022 Dow Jones survey of financial leaders, two-thirds of respondents said that ESG investing is a top driver of sustained, long-term growth. Unsurprisingly, 52% said that the quality of today’s ESG data is not yet good enough to support investment decisions and 58% said greater transparency in how ESG ratings are developed is needed.
Forbes, January 30, 2024. A View Of Artificial Intelligence (AI) From The Trenches. Digital transformation and cyber security ought to be bigger priorities for most companies. “How will AI change the CFO’s job?” My boss, the CEO, keeps asking me, “what’s our AI strategy?” What should I tell her?” I keep getting these questions from students in our CFO program. To investigate ground reality, I chatted with a few CFOs and COOs, off the record. Here is what I found out.
boersen-zeitung.de, January 29, 2024. Next level of artificial intelligence is difficult for banks. Many banks and financial companies have long since mastered data analysis and machine learning. However, the use of generative artificial intelligence to create new content has not yet left the experimentation room, as regulators and the financial sector explain in Frankfurt’s Techquartier.
American Banker, January 30, 2024. AI’s potential to simplify investment banking
American Banker, January 29, 2024. ‘More impactful than the internet’: How AI will reshape banking jobs
American Banker, Bank Think, January 29, 2024. Don’t be wowed by your AI vendor
Wall Street Journal, January 26, 2024. How We Can Control AI. The technology’s rapid advance threatens to overwhelm all efforts at regulation. We need our best tech experts competing to rein in AI as fast as companies are competing to build it.
American Banker, January 22, 2024. Call summaries, co-pilots, cores: Use cases for generative AI
MSN, January 22, 2024. The Bloomberg Terminal Now Has AI-Generated Summaries of Earnings Calls – The large language model has been trained to understand ‘the nuances of financial language and anticipate what’s most important to investors,’ Bloomberg says.
American Banker, January 19, 2024. Regulators say they have the tools to address AI risks. Bank regulators said on Friday that while they are actively exploring the risks that could emerge from financial institutions’ reliance on artificial intelligence, existing tools and laws are sufficient to prevent those risks from harming consumers or the financial system.
American Banker, January 18, 2024. ‘Don’t AI wash’: SEC chief warns against bogus tech claims
Forbes, January 18, 2024. Sustainable Banking: Charting The Future With AI And Data Analytics. The global push for sustainability in the financial sector, driven by the need to achieve net-zero emissions, is increasing the demand for eco-friendly practices in banking. Financial institutions face growing pressure to meet stringent ESG regulations, such as the European Banking Authority’s mandate for climate disclosures starting December 2023. To comply, they need to implement robust policies and procedures for risk management and regulatory reporting, necessitating the use of intelligent analytics platforms to gather and analyze ESG data. Many financial institutions have already incorporated AI and analytics across various functions, leveraging machine learning algorithms to enhance revenue, assess credit risk, improve finance operations, and more. AI can now aid sustainable business strategies by efficiently integrating ESG considerations, offering real-time scores, transaction analysis and risk assessments for informed decision-making.
The Economist, January 7, 2024. What happened to the artificial-intelligence investment boom? Perhaps AI is a busted flush. Perhaps the revolution will just take time. Many economists believe that generative artificial intelligence (AI) is about to transform the global economy. A paper published last year by Ege Erdil and Tamay Besiroglu of Epoch, a research firm, argues that “explosive growth”, with gdp zooming upwards, is “plausible with ai capable of broadly substituting for human labour”. Erik Brynjolfsson of Stanford University has said that he expects ai “to power a productivity boom in the coming years”. For such an economic transformation to take place, firms need to spend big on software, communications, equipment and factories, enabling AI to slot into production processes. An investment boom was required to allow previous breakthroughs, such as the tractor and the personal computer, to spread across the economy. From 1992 to 1999 American non-residential investment rose by 3% of gdp, for instance, driven in large part by spending on computer technologies. Yet so far there is little sign of an ai splurge. Across the world, capital expenditure by businesses (or “capex”) is remarkably weak.
GOVERNMENT:
Call for papers on Artificial Intelligence in Finance: 2024 Annual Meeting of the Central Bank Research Association (CEBRA) 25 January 2024. The FSB invites academic paper submissions for a session on the topic of ‘AI in Finance and its Financial Stability Implications’ at the 2024 Annual Meeting of CEBRA.