Is AI becoming a new systemic risk to the global financial system?
"Accelerating implementation AI "The application in the global financial sector is quietly restructuring the system from human-driven markets to algorithm-driven systems, bringing with it new types of risks that can spread faster than ever before."
In recent years, artificial intelligence (AI) has not only been a new tool for the financial sector, but it is significantly changing the way the financial system makes decisions. From humans assessing risk, it's shifting to a system where algorithms and data dictate market trends. This shift is happening rapidly. Data from The Bank of England stated in 2024 that approximately 75% of financial companies in the UK had already adopted AI, and another 10% planned to do so within the next three years. Furthermore, over 55% of these adoptions involved systems with some degree of automated decision-making, reflecting that AI is becoming the primary decision-making driver in the financial system.
