Banks Rely on Few AI Providers
In brief
- Banks are using AI to automate tasks and help with operations.
- More than 75% of City companies now use AI.
- They use it to process insurance claims and assess customers' creditworthiness.
- This matters because it creates a systemic dependency.
- A problem at one provider could spread quickly across customers and sectors.
- Regulators may increase their focus on operational resilience and third-party concentration in the AI model stack.
- The AI race also risks creating vendor dependence risk, meaning a few providers could control the price of AI services.
- Banks will try to offset these risks by negotiating contracts and using open-source AI models.
- Banks will continue to invest in AI to cut costs and increase revenues.
Read full story at The Guardian →
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