Hello everybody and welcome to another edition of C&F Talks, where I have the opportunity of interviewing one of the speakers at a forthcoming City & Financial Conference. Today, it's a great pleasure to have with me Vivienne Artz, who is a Data Strategy and Privacy Policy Advisor at the Centre for Information Policy Leadership.

Vivienne is a non-executive director, holds a number of expert advisory roles supporting businesses in their data privacy and digital strategies with a focus on AI and new technologies. Vivienne has over 25 years’ experience in global financial and professional services sectors, including at the London Stock Exchange Group, Refinitiv, Thomson Reuters and Citibank. And Vivienne will be chairing and speaking at the Data, AI and Future of Financial Services Summit on the 9th of June in London. Vivienne, welcome.

Thank you very much, Maurice, and I'm really looking forward to the event in June.

Fantastic. Let's turn to our first question.

What do you think are some of the key themes for financial services in the context of AI and data?

It's an excellent question. And I think we start with the fact that financial services has embraced AI for a long time. So, the AI part of it is nothing new for financial services, but the AI has evolved and has developed.

And so, we have traditional analytical deductive AI, which has been very much a part of the financial services operating structure and ecosystem for many, many years. But now we have generative AI as well. And then the future, of course, with agentic AI.

But it might be worth just also thinking about what the FCA sees in terms of the financial services sector and how they're using AI. The FCA recently published some information, and they said that 75% of firms in the financial services sector are using AI and 10% more have plans to use AI in the next three years. And the areas where they're seeing the greatest benefits are in data and analytical insight, which is not very surprising, in anti-money laundering and combating fraud.

And we also know that fraud is 40% of all crime in the UK at the moment. It's really, really significant. So, using AI to address AML and combating fraud is actually very impactful.

And then the third area is in relation to cyber security. There's a bit of a double-edged sword on that one. So, AI in the context of cyber security as a way of addressing it is really important. But the other part of it is that cyber security is seen as probably the biggest risk to AI for the financial services sector. So, there's a lot of themes in terms of how AI data is being looked at in the financial services sector. So those are the areas of business that are being looked at.

But the other pieces to think about are intellectual property, the intellectual property in the data, as well as the intellectual property in the technology, and the intellectual property in the outputs of the technology is something that financial services is looking at. I can't emphasise more the importance of the quantity and the quality of the data that actually trains and instructs the AI tools. Very, very important. And then also the need to check the quality of the data that comes out. Is it actually generating what we want it to generate? Or is it having one of its little hallucinations? Or perhaps it's gone off track in some way? The financial services sector has always looked at things holistically. So, they're also focused on energy and data centres and the issues around sustainability there.

And of course, no discussion would be complete without the ethics and the governance, the auditability and the transparency that's required around AI, because all of that explainability pace and trust pace is hugely important in two ways.

One, so that customers actually understand and have trust in the AI that is helping to provide services to them, but also for employees, their ability to embrace it in a positive way and not to see it as a threat, because we know that AI is a huge driver of potential productivity gains. And a lot of that is interpreted as job losses. It will result in job losses, of course it will, but it'll also result in job creations. So, opportunities for the workforce to reskill, to become a part of the AI solution going forward.

So, so much that we can explore in the conference. I'm really looking forward to it.

It's an absolutely fascinating area, isn't it?

And that, you touched on in your last few comments about the impact on work and employment and the need to reskill the workforce, I think it's going to be key. These are all things which the government's taken up in its AI Action Plan.

And it clearly wants to be a leader across the globe in what it's doing. Do you think that that Action Plan is going to deliver on its objectives? Or what do you think are some of the most important elements of that?

I certainly hope it is going to deliver on its objectives. One of the lovely things about the UK is that we're third in the world in terms of AI. The US and China are leading, but I think it gives us an opportunity to do AI in a slightly different way, to take a responsible approach with regard to the data, to take an approach, which includes both the private and the public sector.

And that's one of the things that's been articulated in the AI Action Plan. So there's, it was came out of Max Clifford's 50 point plan and the government's adopted all of that, two of them just partially, but otherwise all of that, which is really interesting. And so, it covers the whole gambit of AI, everything from supporting the companies and investing in the companies that are innovating in this space to delivering compute sites, which are absolutely necessary if we want to scale up.

One area which I think is really important is identifying and addressing UK owned datasets. What are they? How do we bring those together? And then who do we provide that to? In what way do we make that available? How can we best use those datasets?

And the one that comes to mind, obviously, is our health sector, because we have a centralised health program. But of course, there's other things, particularly in financial services, that could be really interesting and useful, but how is a responsible way of using that? The AI Action Plan does focus on skills and talent, which is hugely important.

And that skills and talent, both from those in schools and educating coming through, reskilling those already in the workforce. And the one area we mustn't forget about, and that's really important, is our older workers are looking to stay longer in the workplace. And actually, how do we include them as part of this transition? And their appetite for reskilling is high.

So, it'd be really great to see the multi-generationals within the workplace, each of them contributing and becoming a part of that. And of course, their wisdom and experience of many years in the workplace and then bringing that to the workplace through an AI lens is going to be hugely impactful.

The other area that the AI Action Plan refers to is cooperating with national security. I've talked before about the politicisation of data and technology. But actually, we don't often focus on the national security element of AI, the impact of the data, and how we need to be cooperating with our colleagues from a national security perspective in relation to a technology and an opportunity that can have such a huge and fundamental impact, not only on our economy, but on other economies as well.

So, an enormous amount in the AI Action Plan, and it's a very thorough run through all the relevant topics. So, fingers crossed that we're going to make good progress.

Yeah, it's a great report that Max has produced.

Finally, because I think we're probably a little pressed for time, how is agentic AI changing the game? And what additional risks and opportunities does it bring?

I was reading a report by the Chief Scientist from Salesforce yesterday. And he was talking about this being, you know, obviously, generative AI has been the main focus for so many people for so long now. But he said, almost immediately, the next phase is agentic. And we're going to see that this year. How's that going to impact financial services?

Well, agentic AI is just a whole different ballgame, because you've got AI systems that are capable of autonomous decision making and action. So, they're not guided by us. It's super exciting, because I can get my agentic AI to go and book my flights.

And so, my bot will go and talk to another bot, and then they will come up with things. But they will also create data in that process. They will find ways of addressing an issue or a challenge without necessarily having been pre-programmed to do so.

So, the opportunities are incredible. But I think the focus on the governance and the ethics and how we use that is going to be more important than it's ever been. So, if we don't have the right frameworks in place from a legal, regulatory, cultural and governance perspective, then I think agentic AI could be a real issue for us.

But as we are finding our way, and as I said, financial services have been embracing AI for many, many years, I think we have an understanding of the process that we need to go through to ensure that agentic AI is going to be something that's helpful and not unhelpful for our businesses in the future. But it's a game changer in the way in which it operates. So, it's machine-to-machine, it's independent of us, and it's highly creative.

Absolutely. Yes, and it's fascinating.

Just a final question, if I may. Can regulators and policymakers actually keep up with this rate of change?

Legislators and policymakers, I think that the joke is that they're always behind. But what we are seeing is a huge amount of engagement on this topic from legislators and regulators. And the other piece of it I think that's really helpful is that we've seen the cooperation between regulators, understanding that AI isn't something that belongs to one regulator, it's something that all regulators need to understand and to embrace.

So, the legislation will set the rules, and the regulators will do the interpreting and the enforcing. And actually, it's fantastic to see how engaged they are with business and with the technology to understand what's going on, to make sure that we have in place the right framework. And I think one of the things that we haven't done in the UK is rush to legislate and regulate, which I think is really helpful, because sometimes you can end up going up the wrong path.

So, I think the pace of change is the right pace of change for the UK, and it's great to see their level of interest and engagement and involvement. They really are taking this seriously, and so they should.

Yeah, absolutely. There are many other issues we could discuss, but time prohibits that. But for our viewers, we'd very much like for you to join us at the conference, the Data, AI and Future of Financial Services Summit on the 9th of June in London, where you'll hear much more on this very, very interesting subject. Further details are available at our website, www.cityandfinancial.com.

And it remains for me to say, thank you very much for sharing those thoughts with me, and I very much look forward to seeing you at the event.

I look forward to seeing you there as well. Thank you so much. Bye-bye.