Eight in ten financial firms are limiting AI or watching it from the sidelines

Following recent concerns and warnings that an AI stock market correction could be about to unfold, almost half (45pc) of senior level executives in Ireland’s financial services industry believe such a correction would “reduce the hype” around AI and help firms adopt more responsibly to the technology.

According to the findings of a nationwide survey by the Compliance Institute of over 150 senior compliance professionals working across Irish financial services organisations, eight in ten (77%) of compliance experts in the financial services sector say that there is either limited use of AI in their own organisation or that they are watching the technology from the sidelines.

Commenting on the survey findings, Michael Kavanagh, CEO of the Compliance Institute said:

“Concerns of an AI stock market correction have been mounting of late. Reputable organisations and banks[1] have warned of the danger of a global stock market crash should investor enthusiasm for companies exposed to the artificial intelligence boom wane, with parallels being drawn with the 2000 dotcom boom and the crash that followed.

Our findings show that the industry itself is already taking a more measured stance. More than half of the compliance professionals we asked said that they were ‘waiting to see proven value’ in AI. And more than one in five (22%) of compliance professionals say their organisation is ‘watching from the sidelines’ on AI because they believe the technology still carries ‘too many risks and uncertainties’.

While many technology companies and investors stand to lose substantially if the so-called ‘AI bubble’ bursts, some believe that a stock market correction is long overdue and indeed that such a development could bring more positives than negatives.”

Additional findings from the Compliance Institute of the research found that:

• Eight in ten (77%) of compliance experts in the financial services sector say there is limited use of AI in their organisation or that they are watching AI from the sidelines.
• More than one in five (22%) are early adopters of AI, with strong integration of the technology into monitoring/reporting.
• A tiny minority (1%) are scaling back on AI due to initial projects underdelivering.

Mr Kavanagh added:

“AI has developed at a rapid pace in recent years.  While there are many benefits to AI, including its ability to detect illnesses and diseases as well as weather patterns and extreme storms, its fast-growing capabilities and increasingly widespread use have raised concerns – such as privacy and misinformation issues, the potential of the technology to lead to job displacement, or even the risk of AI-altered images and videos disrupting the democratic process.

While many believe AI should be embraced for the benefits it delivers, it is important too that AI is used in a safe and transparent way and that there is strong regulation of this technology. Compliance professionals will be deeply aware of the far-reaching consequences of AI and of the need to get AI right if it’s to be used within an organisation.”