Fitch Ratings said that in the next five years, business disruptions caused by artificial intelligence will present a moderate risk to financial institutions. Mitigating factors include entry barriers formed by regulation and a solid business foundation based on customer relationships and business diversification; traditional licensed institutions can also use their own proprietary data to build self-developed AI business systems. Compared to private banking, wealth management is more impacted by AI: private banks still prefer high-touch services, and AI is more used to help maintain customer relationships; wealth management faces the impact of commercialization of financial consulting services and the entry of new competitors, putting pressure on commission rates. Fitch predicts that in the next five years, AI will not trigger extensive rating adjustments in private banking and wealth management sectors; leading institutions can rely on scale effects and lower service costs to cushion the competitive impact brought about by AI.

Disclaimer:Webull uses external vendor Google Translation Service for news translations where we endeavour to ensure these are correct, however, we recommend that you please double-check this information accordingly. Webull is not responsible for translation errors or issues.