AI leads to the transformation of finance and insurance
According to Moody’s, the growth of AI applications will particularly benefit the banking, financial services and insurance sectors.
Indeed, the immediate impact of AI will be felt first in software and semiconductor companies, particularly over the next couple of years. For Moody’s, financial services will therefore be a key sector leading the charge in AI adoption across industries, with AI expected to be adopted ubiquitously across the entire market by 2026.
AI adoption: beware of risks and competition
However, despite the benefits of adopting AI, businesses need to be aware of the risks. If companies deployed AI too quickly without doing due diligence, it could negatively impact their performance – a phenomenon Moody’s expects to see examples of in the coming years.
Media companies could face the risk of increasing competition, as new market entrants best implementing AI technology provide enhanced services compared to traditional players. This could impact financial services companies – as well as businesses across many industries – and how they market their products and services.
Of course, this builds on the expected new set of regulations regarding the use of AI and best practices. While regulators determine how and where regulations will be imposed, businesses must ensure they remain agile enough in their AI integration plans to remain fully compliant.
The EU is set to pass its AI law in H2 2024, and Finserv companies should prepare for the implications this could have on their AI deployment plans.
