The financial services industry is experiencing an unprecedented AI investment boom that signals a fundamental shift in how institutions operate. According to Allied Market Research, AI in financial services reached $13.7 billion in 2023 and is projected to surge to $123.2 billion by 2032.
During my recent visit to India, I had the good fortune of meeting several startups and scale ups and was rather surprised to see the amount of emerging Unicorns in the space who leverage LLMs. I must say I was partial to the LLMs that we use extensively in Financial Services from FinGPT, FinBot, InvestLM, BloomGPT, FinLlama etc .
The digital identity and risk decisioning landscape stands at a critical inflection point—a moment where traditional fraud prevention measures have become alarmingly vulnerable to sophisticated attacks. As cybercriminals harness AI and automation to bypass conventional security measures, organizations aren't just falling behind—they're facing an existential threat to their digital trust infrastructure.
The President and his team need to be commended for the significant steps taken to expand the type of investments allowed within 401K retirement plans to include Alts such as private equity, real estate and digital assets. While these changes are good for diversification they also introduce new risks and fiduciary responsibilities.
Artificial Intelligence (AI) is not just another emerging technology. It is a new production function, reducing the cost and spread of cognition in the same way electrification reduced the cost and spread utilization of power. For banks, this shift brings both exponential opportunities and existential risks. The winners will be those that embed AI as a core operating model. The losers risk losing relevance in a market increasingly defined by AI-native fintechs and forward-leaning incumbents.