Artificial Intelligence (AI) in the Financial Sector—Potential and Public Strategies

Abstract

AI is providing a significant basis for future technological innovation. The financial sector will be transformed by AI, offering the opportunity for better and more tailor-made services, cost reduction, and the development of new business models. The Federal and the Hessen governments recently published roadmaps for the further development of AI in Germany and Hessen, respectively. The Federal Government will invest three billion euros over the next 5 years in a variety of research and business sectors whereas the State of Hessen will set up a new AI-oriented institute of applied research and business development and spend one billion euros over the next 5 years on digitalization development. The public strategies for building AI hubs are still extremely diverse. However, the focus is on stronger application of research results in business activities, on increasing networks and ecosystems and predominantly on building on existing centers of excellence. The Frankfurt Rhein Main Region, already a strong hub for fintech, cyber security, and AI, will especially benefit from these programs. The financial center Frankfurt offers a vivid and fast growing tech and start up community a well as an academic and data infrastructure unprecedented in Europe: the largest data and cloud service hub in continental Europe, the worlds largest internet knot, universities, research institutes with global quality research in AI, as well as companies and consultancies specialized in AI and neighboring areas such as fintech and cyber security.