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Big Data and Banks
AI For You
June 24, 2024
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There has been a lot of chatter as to how tech will be incorporated within banks and it has been all good and well until now.
AI was being widely used to detect fraudulent activities related to various transactions and for this banks relied on tech firms like Amazon and Google since the technology was something they could never build on their own.
In a recent meeting where all the top European banking officials were present, this issue was addressed for the first time and that is when they felt that this issue is as real as it can get.
Banks and their dependence on the small number of tech firms is one of the biggest risks for them. It works like any other addictive scheme would. These tech firms give the banks just enough of their services to make them heavily dependent and when they are latched to the product, the tech firms end up forming a cartel.
Economics 101
Whenever you see a product that is a market fit, and has no substitutes, the way to go forward is to hike prices and maximize your profits.
AI companies need big data to work on their models. The UK restricted the banks on how much they can rely on external big tech firms as they fear that any disruption in any one of these tech firms’ operations would end up destroying these banks.
All these decisions are making the regulatory authorities around the world rethink their policies. The banks are also revaluating their decisions to enter into collaborations with these tech firms, which no matter what will go through but the terms might be renegotiated.