INTERSECTION: AI AND REGULATION IN FINANCIAL SERVICES
A key driver of a new evolutionary stage of human knowledge, artificial intelligence (AI) is a major force that connects human intelligence and the development of sophisticated collective intelligence.
Across virtually all sectors and industries, AI, and its subfields machine learning (ML) and generative AI (GenAI), is proliferating. It is optimising decision making, improving the management of uncertainty and boosting competitiveness and innovation, particularly in key sectors such as financial services (FS).
However, although AI can improve operational productivity and create new value opportunities, its adoption across the FS sector has been less agile than in other industries.
“FS has been relatively slow to embrace AI, most likely because the sector is risk averse and regulated firms need to be confident that however they use AI, it is not to the detriment of customers or regulatory compliance,” explains Michael Lewis, a partner at Womble Bond Dickinson (UK) LLP. “Early on, FS firms used AI for fraud detection and other financial crime prevention purposes, but they are now becoming more ambitious.”
This ambition is reflected in a major uptick in investment. According to Nvidia’s ‘State of AI in Financial Services: 2025 Trends’ survey, investment in AI infrastructure is seeing a robust increase, with 98 percent of management saying they will further increase spending in 2025.
Moreover, over half of companies, states the survey, now view AI as crucial to their future success, indicating a growing reliance on AI as a strategic business lever. AI challenges are also receding, with 50 percent fewer respondents reporting a lack of AI budget and significantly fewer companies reporting AI data issues.
Jul-Sep 2025 Issue
Fraser Tennant