The mainstream emergence of generative AI is putting unprecedented power and flexibility into the hands of anyone who wants to use it. A person needs only the skill of natural language to operate it. For the financial services sector, generative AI tools present tremendous productivity-boosting potential: imagine writing code in a fraction of the time it normally takes, delivering highly-personalized services like investment guidance via a chatbot, preventing fraud and money laundering, and streamlining processes for customers and lending teams.
But these tools require careful consideration of the risks. While it’s predicted that generative AI will fundamentally transform business and even our way of life, the risks are not well-understood. Along with the possibility of generating misleading or discriminatory outputs, the risks involve privacy, cybersecurity, regulatory compliance, and intellectual property, among others.