Artificial intelligence in banking: opportunities, risks and governance challenges

The opportunities offered by artificial intelligence to the banking sector, but also the risks that arise from it and which require additional attention. We talked about it with Gianluca Tiani, head of the Strategy, Innovation and International division of Abi.

What are the areas of application of artificial intelligence that can mark a profound change in Italian banks?

"AI can help improve customer services, strengthen controls and identify fraud and anomalies more quickly. However, it requires strengthening control and security safeguards, which banks are already working on, and it would be a mistake to consider it just a technology to be purchased and used. AI requires a deeper change in the way we manage data, processes, governance and security".

How are banks addressing this context?

"They do so starting from a fundamental principle: innovation and security must proceed hand in hand. Artificial intelligence can be an accelerator of growth, but only if accompanied by effective governance, based on transparency, responsibility and centrality of the person. For this human control, skills and continuous training represent decisive elements. The challenge is not only technological, but concerns the ability to integrate AI into the governance and development strategies of the sector".

How much is the adaptation to new European rules on cybersecurity such as Dora, the new European Union regulation that strengthens cybersecurity and digital resilience of the financial sector, weighing on banks' budgets?

"The adaptation to Dora is part of an investment path that the banking sector has been carrying out for years. Italian banks spend a total of around one billion euros a year on physical and cyber security, with a growing trend and in a context that sees over 6 billion euros of ICT spending. Dora represents a very important reference because it promotes an organic model of governance of outsourced services and contributes to strengthening digital operational resilience. The real challenge is to prevent compliance from becoming the point of arrival: the rules are a common basis, but security and resilience must be pursued every day through investments, continuous updating and skills".

With the rise of cloud services, has dependence on a few tech giants become the main risk for data security?

"The growing diffusion of cloud services requires attention, but today the broader issue is that of the resilience of the entire digital ecosystem. Banks are strengthening the monitoring of technological suppliers and the ICT supply chain, recognized as increasingly relevant elements in the management of operational and cyber risk. In this context, operational continuity, the management of critical suppliers, investments in security and the ability to prevent and respond promptly to new threats become fundamental".