Artificial Intelligence in the era of Open Banking
The Euro Banking Association’s (EBA) Open Banking Working Group (OBWG) latest research currently focuses on the potential of Artificial Intelligence (AI) in the financial services sector and the challenges and opportunities it holds when combined with data exchange enabled by Open Banking.
Data sharing in the context of Open Banking combined with AI can improve the efficiency of operations and decision-making through automated and autonomous decision-making and insight creation. Against the background of the General Data Protection Regulation (GDPR) and the revised Payment Services Directive (PSD2), which regulate the availability and accessibility of data in the era of Open Banking, the impact of AI on financial services can be seen in three strategic areas: processes, products & services, and markets.
The latest report by the EBA’s OBWG “Artificial Intelligence in the era of Open Banking” zooms in on the potential that lies in the collaboration between Financial Institutions (FIs) tackling AI challenges together and thereby creating opportunities that may help to build a more efficient and resilient financial system:
- The adoption of AI is being held back by several organisational (availability and accessibility of data, competent resources in this area and cyber security) and societal challenges (bias, transparency, liability) that could be tackled collaboratively.
- Currently, AI is mainly used in the competitive space to create leaner and faster operations as well as tailored products and services. However, AI could be used collaboratively as well to create a more secure and efficient financial system, e.g. by identifying patterns of threats that cross institutional boundaries.
- If financial institutions want to realise this potential of collaborative AI, they need to leverage the data made available and accessible through Open Banking.
- Therefore, efforts to standardise APIs across the EU need to focus on increasing the functional scope and the quality of the data available, so that AI can be used to transform these data into valuable insights.
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