Financial Services sector calling out for clear …

Financial Services sector calling out for clear line of sight on Artificial intelligence ( AI ), ...

The Financial Services (FS) sector is optimistic about future growth, with eight in ten respondents confident in industry prospects. However, the lack of clear and proportionate regulations around AI and ESG (Environmental, Social, and Governance) is a significant challenge, as 58% of respondents cite regulation complexity as a key issue. Nearly three-quarters (73%) believe current regulations stifle innovation efforts. Despite the optimism, businesses are struggling to find in-house specialists in AI, leading to a reliance on specialist subcontractors. This could leave firms behind in the future. The US and EU are seen as attractive markets for growth, while South African and Middle Eastern respondents are most optimistic about the positive impact of AI. Ethical AI frameworks are lacking, with only 56% of organizations developing them. This puts businesses at risk of not meeting stakeholder, customer, and board demands around AI deployments. The importance of ESG is also highlighted, with nearly half of businesses globally aiming to position themselves as leaders and innovators on sustainability and ESG. Businesses are concerned about achieving their ESG goals, with over half (56%) seeking more regulation to support them. The biggest challenges include reputational risk, integration of ESG throughout the business, and accurate reporting. In summary, while the FS sector is optimistic about future growth and the potential of AI and ESG, the lack of clear and proportionate regulations is a significant challenge. Businesses need to develop ethical frameworks and plan for resourcing and regulatory horizon scanning to navigate the opportunities these trends offer. Proportionate regulation in African markets is crucial to limit regulatory arbitrage and protect the sector s integrity. DLA Piper can help clients simplify cross-border challenges and support resilience in the face of changing risks.

Source: businessghana.com
Published on 2024-09-21

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