AI in the Financial Industry: How to Prevent Data Breaches

The EU lags behind major US and Asian competitors in information security expenses per IT spending or employee. Compared to other areas of economic activities, financial institutions seem to be more complacent regarding potential system breaches. However, they are also better equipped to quickly identify inconsistencies because their infrastructure seems comparatively less complex. With the prospective application of NIS 2 Directives, it is imperative to examine the challenges financial institutions face with the current increase in AI capabilities that hackers and other malevolent actors could use without impunity if proper countermeasures and systems are not deployed. In this study, we provide an overview of challenges that financial institutions could face, but we also discuss solutions, such as advancements in generative AI products or the widespread application of behavioral biometrics, which should increase the reliability of online activities and prevent the abuse of personal data on a broader scale. Apart from specific company solutions, we provide a discussion platform for government decision-makers.