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Rules, Banks and AI

The potential of AI is the subject of a new inquiry in the British parliament, where the Treasury Committee will look at the use of AI in banking, pensions and other financial services. "Figures recently published from the Bank of England show that 75% of firms are already using AI, with a further 10% planning to use it over the next three years," reports Finextra. "However, the launch of 'DeepSeek' reminded observers of the volatility and rapidly evolving nature of the AI market." The UK's early lead in AI has diminished but the Treasury Committee has a lot of questions and wants to know how the City of London can drive innovation with AI. The questions under review include how AI is currently used and how it will change over the next 10 years; What are the risks to financial stability; and how the UK government should balance regulation and innovation in AI. The reality is that the use of AI is far more diffuse than some imagine or fear. Types of AI are used widely in many services, from monitoring card fraud to chatbots to credit scoring, while businesses such as Klarna are claiming that the use of AI agents greatly cuts down the need to hire new workers. "It's critically important the City can capitalise on innovations in AI and continue to be a world leader in finance," said committee chair Dame Meg Miller. "We must, though, also be mindful of ensuring there are adequate safeguards in place to mitigate the associated risks, particularly for customers. This piece of work will allow us to see the full picture."

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