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The rise of artificial intelligence—benefits and risks for financial institutions and financial stability

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Published on: 06 June 2024

Published by a LexisNexis Banking & Finance expert

Table of contents

Opportunity for financial institutions—enhanced processing and generation of data
Associated risk—data quality issues
Opportunity for financial institutions—adaptability, flexibility, and scalability
Associated risk—bias, hallucination, and substantial complexity
Opportunity for financial institutions—increased efficiency
Associated risk—less predictability, misuse, and overreliance
Opportunity—improved accuracy of quantitative predictions
Associated risk—reduced robustness of predictions
Opportunity for financial institutions—improved efficiency of operational processes
Associated risk—increased operational risk and third-party dependence

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Article summary

Banking & Finance analysis: This News Analysis looks at the key points made in the European Central Bank’s Financial Stability review, published in May 2024. The review looks at the rise of artificial intelligence (AI) and the benefits and risks it holds for financial institutions and financial stability more generally.

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