At the financial technology executive meeting held in Amsterdam this week, some European banking industry insiders warned that the prosperity of artificial intelligence will increase the industry's reliance on large American technology companies and bring new risks to the industry.

Currently, only a few technology providers have the computing power required to develop artificial intelligence, most of which are in the United States, such as Microsoft, Google, IBM, and Amazon. Excessive reliance on these technologies will put European banks at risk.

More reliance.

Since the launch of ChatGPT at the end of 2022, banks have begun to study and deploy methods for using generative artificial intelligence in their services, and excitement about the use of artificial intelligence in financial services is increasingly escalating. Currently, artificial intelligence has been widely used for fraud and money laundering detection.

At the meeting, Bahadir Yilmaz, the chief analyst of ING, predicted that the company would increasingly rely on large technology companies in terms of infrastructure and machines. Yilmaz is responsible for the Dutch bank's artificial intelligence operations.

"You will always need them, because sometimes the computing power required for these technologies is very large. It is not feasible for banks to develop this technology either," he said.

Joanne Hannaford, the technology strategy director of Deutsche Bank Enterprise Bank, also acknowledged earlier this week that "artificial intelligence requires a lot of computing power, and the only way to use this computing power reasonably comes from large technology companies."

Arthur Mensch, CEO of French artificial intelligence startup Mistral AI, told attendees that there was a "synergistic effect" between its generative artificial intelligence products and financial services. Mistral AI is seen as France's OpenAI.

Potential risks

However, Yilmaz of ING also expressed his concerns and warned that reliance on a few technology companies is "one of the biggest risks" for banks.

He also emphasized that European banks in particular need to ensure that they can switch between different technology providers to avoid the trouble of "supplier lock-in".

Currently, ING is testing an artificial intelligence chatbot, which is used in 2.5% of customer service chats. When asked how long it would take for this chatbot to become popular with half or more of customers, Yilmaz said, "Within a year."

In a statement on artificial intelligence released last week, the European Securities and Markets Authority (ESMA) stated that banks and investment companies have a legal obligation to protect customers when using artificial intelligence. The agency warned that this technology could have a negative impact on the protection of retail investors.

Last year, the UK proposed regulatory requirements for financial companies to prevent their heavy reliance on external technology companies. Regulators are concerned that if a cloud computing company has problems, it could drag down the services of many financial institutions.