Key Takeaways from the Transform Finance Roundtable: Balancing Customer Expectations with Compliance in the Age of AI

At a recent roundtable organised by Transform Finance, industry leaders – including SE’s very own Ben Rayner – came together to explore how financial institutions are navigating the complex intersection of AI adoption, customer demands, and regulatory pressures. The conversation shed light on the uneven landscape of AI integration across the financial sector, the barriers holding back progress, and practical steps to bridge the gap.

Here are the key insights:

Current Landscape: The Enthusiasm – Hesitation Dichotomy

While some organisations see enthusiastic backing from senior management for AI-driven solutions, this excitement often stalls before translating into tangible action. Many firms are cautious, waiting to see how peers and regulators move before fully committing. In some cases, past negative experiences – rooted in poor preparation, data misalignment, and misunderstanding of AI’s capabilities – have left teams unsure of how to proceed.

Factors Holding Organisations Back From Adopting AI

Roundtable participants identified the main obstacles to greater AI adoption:

• Cultural Divide: There are conflicting views within organisations on AI. The lack of a unified strategy or mindset can create fragmentation between departments.

• Technology Team Capabilities: Traditional financial institutions often lag behind neobanks and fintechs, struggling with a skills gap and limited experience in implementing cutting-edge AI solutions.

• Uncertainty due to Regulatory and Geopolitical Shifts: The unpredictable nature of regulatory environments, particularly in jurisdictions like the US, causes a "wait and see" approach, slowing innovation.

• No One-Size-Fits-All Solution: Many firms are looking for one solution from a single vendor, but single, groundbreaking solutions for all use cases do not exist.

Overcoming the Challenges

To move from inertia to action, participants discussed several effective strategies:

• Drive Culture from the Top: Leadership must actively foster a culture where teams feel empowered to experiment with AI. Creating safe environments to "fail fast" helps build trust and learning.

• Promote Experimentation at All Levels: Encouraging employees to explore how AI can enhance their day-to-day roles increases familiarity and, ultimately, confidence in the technology.

• Early Engagement of Tech Teams: Involve technology teams early in vendor discussions to identify capability gaps and consider whether partnerships could fill those gaps effectively.

• Tailored Vendor Selection: Instead of defaulting to an enterprise-wide solution, consider specialised vendors for specific challenges to maximise impact.

What Success Looks Like

Successful AI adoption is more than just implementing a new tool. The group agreed that success means:

• Seamless Integration: AI solutions should integrate into existing ecosystems, reducing friction for users rather than adding complexity. The best solution is one that goes even further, pulling systems together.

• Clear Proof of Value: Deploy solutions that deliver measurable results and can be clearly articulated, not just internally but also to regulators.

• User-Centric Data Presentation: Outputs should be intuitive and customisable to suit the client’s needs.

• Problem-Driven Solutions: Most critically, the AI solution must directly address the specific problem statement rather than forcing the problem statement to fit the solution.

The Regulator’s Evolving Role

Regulators are increasingly supportive of AI exploration within Financial Crime Compliance. In fact, several are keen to understand why organisations might not be considering AI. The Monetary Authority of Singapore (MAS) frequently stood out in discussions, with its COSMIC initiative praised as a model of regulatory innovation. However, attitudes vary globally.

A key takeaway: take the regulator on the journey along with you. Bringing them into the conversation early fosters mutual understanding and allows regulators to become familiar with organisations’ strategies.

The Bottom Line

The roundtable made it clear that AI adoption in financial services is no longer a question of "if" but "how." While cultural, technical, and regulatory hurdles persist, organisations that approach AI implementation with a clear strategy, strong leadership, and early engagement with regulators will be best positioned to meet customer expectations along with regulatory demands.