The Bank of England needs you

AI is certainly big news at the moment – some professionals have already called it dangerous for the industry, others say there is no threat – for now.  And a call for members for a new consortium means that you could potentially have a say in steering its adoption.

The Bank of England has announced an open call for membership in its newly established Artificial Intelligence Consortium, with applications due by November 8, 2024. The Consortium, chaired by Sarah Breeden, Deputy Governor for Financial Stability, will serve as a forum for public-private collaboration aimed at exploring the impact of artificial intelligence (AI) in the UK financial sector. The group’s primary focus will be on identifying AI’s current and potential uses, assessing its benefits and risks, and guiding the Bank’s policies on AI deployment in financial services.

The Consortium is expected to have around 30 members, selected based on their expertise in AI and financial services. Interested candidates can apply here and are required to submit a 500-word summary outlining their suitability for the role, along with a 250-word proposal suggesting a topic for discussion in one of the group’s quarterly meetings. The Bank will consider a range of criteria in its selection process, including professional experience with AI, policy awareness, and the ability to commit time to the Consortium’s work.

The Consortium aims to provide insights into how AI can enhance financial services and address associated challenges, but it is not involved in regulating the Bank of England’s internal AI use. Members will meet four times a year to discuss issues such as technological advancements and policy implications. Special workshops may also be formed to dive deeper into complex topics.

The Bank is keen to ensure diversity in both perspective and expertise, inviting applications from professionals across various sectors, including academia, financial services, fintech, and technology firms. Membership is voluntary, and participants will not be compensated for their involvement.

According to the terms set out by the Bank, members will provide technical, analytical, and business insights in their personal capacity, representing broader industry perspectives rather than the views of their individual organisations. Members will be responsible for attending meetings, contributing to discussions, and potentially leading workshops focused on specific AI-related topics. Importantly, they must disclose any conflicts of interest and adhere to competition laws.

While the Consortium will serve as a key advisory body, it does not have decision-making authority. Instead, the Bank will use the insights and outputs generated through discussions and workshops to inform its policies on AI in the financial sector. Although the Bank is not obligated to act on the Consortium’s recommendations, its discussions are intended to influence how AI is safely adopted in the industry.

Meeting summaries will be published on the Bank’s website to ensure transparency. However, outputs from the workshops may not be publicly released unless the Bank grants permission.

Overall, the Consortium offers a unique platform for dialogue on the evolving role of AI in financial services, aiming to navigate the associated opportunities and challenges in a balanced and informed manner.

AI uptake in the financial sector

AI adoption in the finance industry has significantly accelerated in recent years, with a focus on improving operational efficiency, enhancing customer service, and driving innovation. Here are some key trends based on recent data:

1. Uptake and growth: According to chipmaker Nvidia, by 2023, around 85% of financial institutions had implemented AI to streamline operations, with use cases like fraud detection, algorithmic trading, and risk management leading the way. This number is projected to rise to 90% by 2025​
2. Operational efficiency: AI is being widely used to automate routine tasks, improve data processing, and enhance decision-making. Around 36% of financial services executives reported reducing operational costs by 10% through AI integration. Additionally, 66% of banks have seen performance gains, particularly in customer service and fraud detection​.
3. Generative AI’s role: Generative AI is becoming increasingly important in areas such as personalised customer experiences, automating document processing, and even predictive analysis for investments. McKinsey estimates that generative AI could automate up to 70% of business activities in the banking sector, potentially reshaping workflows and talent needs​, and some studies have already shown AI can be better at picking investments than investment advisers.
4. AI across business areas: AI is being integrated into various functions, including customer service (through chatbots), loan processing, and compliance monitoring. Around 60% of firms are using AI across multiple departments, improving both back-office functions and customer-facing services​.