High-Calibre Discussion: “AI & Banking – Risks and Opportunities”
On 16 November 2023, within the framework of Fintech Week, Binder Grösswang held a panel discussion with highly qualified experts from the business sector, academia and the Financial Market Authority (FMA).
Gerda Holzinger-Burgstaller (CEO, Erste Bank Oesterreich), Anna Muri (Senior Specialist for IT Risk Supervision, FMA), Michael Landolt (Chief Digital & Information Officer. UniCredit Bank Austria), Jörg Egretzberger (CEO, Trustbit) and Žiga Škorjanc (University of Vienna, Department of Innovation und Digitalisation in Law) discussed the opportunities and risks of artificial intelligence (AI) in finance. ORF moderator Rosa Lyon led the discussion.
The event took place within the framework of Fintech Week in cooperation with the Austrian Bankers’ Association and Fintech Austria.
“AI will influence the financial market substantially. Apart from the numerous opportunities that will arise, it will be necessary to keep an eye on the risks involved as well as on the continuously developing regulatory environment. We hope that today’s panel discussion will make an important contribution in this context,” said the initiator of the event, Partner Stephan Heckenthaler of Binder Grösswang’s banking & finance team.
“The finance sector is undergoing a transition strongly characterized by innovations and digitalization. The use of artificial intelligence is the logical continuation of this path. However, not everything that is possible is also an improvement for business enterprises. We have been advising our clients on legal questions related to AI for a long time, and we look forward to discussing these subjects with experts from other fields at the impulse event,” added Managing Partner Andreas Hable.
The panellists all agreed on one point: The use of AI is going to become a matter of course. Companies will have to deal with the subject intensively, if they have not already done so.
“Erste Bank is the first Austrian financial institution to launch a financial AI solution focused on providing financial knowledge in a playful and easily comprehensible way. It involves a highly developed, text-based chatbot that uses natural language. Our prototype does not replace personal counselling, but it allows us to support people in improving their financial health in an easily accessible way. With our Financial Health Prototype, we are experimenting with another building block in our efforts to make the financial world less complex for our customers,” explained Gerda Holzinger-Burgstaller, CEO of Erste Bank Oesterreich. “AI is an innovative experiment that has forced us, as a company, to address AI with the involvement of our marketing, compliance and legal departments.” She is convinced of the future key role of artificial intelligence in banking: “In the near future, there will be no customer relationship that does not involve AI.”
This assessment is shared by Michael Landolt, Chief Digital & Information Officer of UniCredit Bank Austria: “The development and direction are absolutely clear: AI is here to stay – and especially in Europe it is important not to sit back and wait for completion of the regulatory framework.” On the contrary, Landolt believes that we need to make use of a wide variety of tools, because “others will do so and thereby gain a competitive advantage”. According to Landolt, there are already specific AI projects at Bank Austria as well – for example, internally, in order to simplify marketing campaigns or automate the generation of protocols. “Particularly in the case of repetitive activities like the latter, AI will play a more important role in the future,” Landolt affirmed. He also sees great potential for the use of AI in the further development of online and mobile banking.
With the progression of digitalization and the increasingly rapid further development of AI, there is a growing risk of becoming a victim of cyber-attacks, pointed out Anna Muri, Senior Specialist for IT Risk Supervision at the FMA. “It is well known that the financial market is a particularly popular target of cybercrime, and this could be significantly exacerbated through AI, in terms of both quantity and quality – AI is therefore highly relevant for us as well, and we have placed a special focus on it.” Moreover, Muri explained, the FMA is already taking a technology-neutral approach to its regulatory activities. “If, for example, a company offers robo advice, this system will be examined to determine whether it complies with the regulations of the Markets in Financial Instruments Directive (MiFID) – regardless of whether it is an AI-based system or not. This will not change, but in this respect the FMA already has regulatory experience,” said Muri, who also emphasized that the FMA by no means wishes to hold back technology.
The European Union’s answer to the risks arising from artificial intelligence is the Artificial Intelligence Act (AI Act). “The purpose of this EU regulation is to create a legal basis for the development and use of AI, in order to prevent or minimize possible damage that could arise through AI,” explained Žiga Škorjanc of Department of Innovation and Digitalisation in Law of the University of Vienna. In addition, the AI Act introduces uniform rules for the AI market throughout the entire EU, so that this technology can gain a better foothold in the EU. In the estimation of legal experts, “the final version of the AI Act will hopefully be available before the European elections in June of 2024; this will be followed by a transition period of 24 to 36 months.” The introduction of such a regulation could definitely give Europe a competitive advantage, Škorjancadded.
Jörg Egretzberger, CEO of Trustbit, shares the opinion of the other panellists that companies that begin making use of AI today will have a clear competitive advantage. “AI supports us in acting more efficiently, reacting more swiftly and providing more personalized services. Moreover, by using AI we can concentrate our energies more fully on what is really important.” Essential to the successful application of AI in any company, Egretzberger believes, is the definition and consistent implementation of a strategy. He also pointed out that the development of AI is extremely rapid, which raises the intrinsic question of what the next major trend will be: “A keyword here is Conversational AI: There will be a lot happening here in the near future – to give just one example. In addition, there is already a strong trend towards solutions from the open-source sector, a lot of competition for ChatGPT,” the IT expert said.
The latest discussion in the Binder Grösswang impulse series was held in the conference area of the firm. The highly topical nature of the subject was underlined by the high attendance at the event, the lively participation in the discussion, and the intensive conversations among the guests at the get-together afterwards.