Despite recent advancements in artificial intelligence and its growing adoption across industries, experts caution against the potential risks of applying AI technology to the financial sector. At the 2024 Financial Street Forum in Beijing on Saturday, industry representatives expressed concerns about the technology's potential to generate false information and disrupt market stability. However, they also acknowledged that with appropriate risk management, AI could offer significant benefits to businesses, investors and the real economy.

Artificial intelligence is revolutionizing the financial industry at an unprecedented pace. Wouter Stinis, CEO of Optiver Asia Pacific, noted that from lightning-fast algorithmic trading to sophisticated enterprise analytics, AI is permeating every corner of finance. It is not only capable of executing complex trading decisions but can also forecast market trends, providing investors with personalized wealth management solutions.

China has also been introducing AI to the financial industry in recent years. AI technology has been extensively implemented across various facets of the financial sector, including financial product design, marketing, risk control, customer service and supporting activities. Many institutions have been developing a range of AI-assisted applications.

According to Zhang Dong, executive vice president of China Mobile, the company has developed over 100 AI-powered financial applications, including tools for investment research, asset management, risk assessment and fraud prevention.

Lyu Zhongtao, chief technology officer of the Industrial and Commercial Bank of China (ICBC), stated that ICBC has developed large-scale AI models with hundreds of billions of parameters that cover a wide range of capabilities, including computing, algorithms, data and security. "These models have been successfully deployed in over 100 business scenarios across more than 20 business areas," he said.

However, the widespread application of artificial intelligence in the financial sector has also given rise to new challenges.

Shang Fulin, chairman of the Committee for Economic Affairs of the 13th National Committee of the Chinese People's Political Consultative Conference and former chairman of the China Banking Regulatory Commission, highlighted several challenges posed by AI in the financial sector. The complexity of AI models can threaten financial stability, while outdated data can hinder their predictive accuracy. Additionally, the extensive use of sensitive data in AI applications increases vulnerability to cyberattacks and data breaches.

The panelists also shared insights on how the financial industry can harness the power of AI while mitigating its potential risks.

Shang emphasized that the financial industry should proactively explore the applications of large language models in areas such as risk management, credit approval and fraud detection to enhance intelligence, streamline processes, and establish a robust digital ecosystem, ultimately delivering more convenient services.

Stinis advocated for a collaborative effort among governments, regulators and market participants to establish strong regulations that foster the sustainable and responsible development of AI. "With proper risk management, AI can bring substantial and widespread benefits to businesses, investors and the real economy," he asserted.

Li Yang, a member of the Chinese Academy of Social Sciences and chairman of the National Institution for Finance & Development, believes that the rapid advancements in artificial intelligence require a holistic assessment of its societal implications. To fully harness AI's potential while mitigating its risks, comprehensive social policies are imperative.

"By strategically investing in education, reforming tax systems and implementing robust regulations, we can ensure that AI development serves the broader public interest, prevents technological monopolies, and fosters a more equitable and inclusive society," Li said.

(Cover image from the Financial Street Forum 2024 organizing committee)