Financial services firms increasingly concerned about the risks of implementing disruptive tech, including AI

The risk of imposing disruptive technologies has shot up the agenda for UK C-suite executives in the financial services industry over the last two years.

UK FS executives are also more concerned about the risks posed by implementing AI and other disruptive techs than their global peers, according to a new Accenture study.

The research shows that 31% of financial services chiefs in the UK said that implementing disruptive tech, including AI, had become a more significant concern in the last two years.

Furthermore, the intersect between different risk types is becoming ever more important. 35% of UK financial services executives said that implementing disruptive technologies has escalated the importance of financial risks (market, credit, liquidity risks).

Globally, operational risk factors (cyberattacks, supply chain disruption) were seen as more significantly impacted by implementing disruptive technologies. Both areas are also seen to be impacted by climate change and increasing environmental risks. 

Heather Adams, managing director, head of risk strategy & consulting at Accenture commented: “Implementing artificial intelligence has shot up the agenda for businesses across all sectors in the last two years, as business growth and efficiency benefits are becoming clearer. Amid the hype, it’s little surprise to see that UK financial services firms are increasingly concerned about the risks its implementation could pose to their businesses.”

What does the data mean for risk managers?

Risk managers in the UK need to be ready to respond to the risks associated with the take-up of disruptive technologies and AI. In many cases, this requires upskilling to understand how these risks are evolving and where they can present themselves.

This also typically involves improved collaboration across risk managers and business operations. It is important to consider where these risks can emerge, not just within core business services, but also across a network of third-party service providers.

A wide range of technology and operations services are becoming increasingly augmented with innovations in technology and AI. As this happens, the risk profile is evolving, and the control environment will need to evolve in lockstep.

Furthermore, the intersect between different risk types is becoming ever more important. 35% of UK financial services executives said that implementing disruptive technologies has escalated the importance of financial risks (market, credit, liquidity risks).

Adams says: “If embraced in a safe and responsible way, AI and other disruptive technology can help mitigate some of the other risks, for example, by better detecting operational threats and improving talent productivity.”

What can organisations do to tackle the risks?

New innovative technologies inherently bring some uncertainty, and with uncertainty comes risk in the short term. To mitigate these risks, risk managers should implement robust governance frameworks and improve data quality controls.

Adams says: ”A broad set of controls will need to evolve as the way businesses operate continues to adapt. Investments in data need to be targeted and in areas that increase insight that can be used for risk management.

“Similarly, investments in building operational resilience and sustainability, and in responding to prudential regulations, should also be laser focused. The goal is to increase confidence without exploding cost.”