Firms in the financial services sector now face a “Catch-22 situation” when it comes to adopting artificial intelligence due to the messages from the regulator.
This is what Iress head of relationship management – wealth UK, Gareth Williams, told delegates at The Verve Group’s Evolution 2024 conference today (9 September).
Williams explained that the Financial Conduct Authority has stated that it wants firms to use AI, but added the regulator has not said how businesses can use it yet.
At the end of August, research from the CFA Institute showed that the vast majority (85%) of investment professionals believe there needs to be industry-wide standards and ethical guidelines for AI use.
Additionally, 82% said the lack of such standards hinders faster adoption.
The CFA also found that 47% said their business is not well prepared for potential regulatory changes regarding AI/GenAI.
Also speaking at The Verve Group’s conference was BareRock founder & CEO Jonathan Newell, who added that people should adopt a “learning mindset” when taking on AI.
He said that one of the most powerful aspects of AI is that it removes human bias, “which is a massive tick in the Consumer Duty box”.
Newell added that a fear surrounding the use of AI is that firms can lose the “powerful emotional human connection”.
Still, said Newell, “there are lots of great opportunities in AI”.
Woven Advice co-founder Nicky Sevel, speaking on the same panel, said any firm “needs to understand what it is looking for” before starting its software journey.
Once a firm has done this, the list of 150 technology vendors will narrow down to 25 tech providers, Sevel added.
