Can Generative AI Help Financial Institutions Mitigate Risks?

Generative Artificial Intelligence (Gen AI) has emerged as a groundbreaking instrument that has the potential to revolutionize operations, risk management, and customer engagement within the financial sector. This research project investigated the incorporation of Gen AI within financial institutions, highlighting current and potential use cases, associated risks, and vulnerabilities. The Capstone consisted of two major efforts. First, the team conducted a thorough literature review on the regulatory environment in the U.S., Europe, and Asia-Pacific regions. This was followed by in-depth interviews with professionals in the financial sector, focusing on five Gen AI-related areas: workforce, workflow, security and risk, industry, and regulations. 

By contrasting policies and practices across regions and various financial institutions, this research explains the variations in regulatory approaches, organizational responses, and societal attitudes toward Gen AI in the finance sector. Furthermore, the Capstone used the cumulation of interviews with policy and literature reviews to determine key recommendations for the strategic utilization of Gen AI in financial institutions.