Digital Economy Soundbite | AI in Financial Services: ECON publishes draft report

The European Parliament's Committee on Economic and Monetary Affairs (ECON) has published a draft report and motion for a resolution (dated 14 May 2025) on the impact of AI on the financial sector. The report finds that AI adoption in financial services has so far been prudent, with the Committee recognising the benefits of AI for the sector and cautioning against an overly restrictive regulatory approach. The Committee calls on the European Commission to support responsible AI adoption by providing clarity on the application of existing sectoral regulation, and simplifying the regulatory framework.

State of AI adoption

ECON's assessment reveals that most current AI use cases are focused on streamlining back-office processes rather than high-risk innovation. ECON acknowledges the potential of AI to deliver societal benefits such as fraud detection, anti-money laundering checks, and more personalised consumer services.

Managing AI-related risks

While recognising the risks associated with AI, including concerns around data quality, explainability, and transparency, ECON argues that the financial sector is already well positioned to address these challenges. The sector operates within a highly regulated environment at both national and EU levels, with existing legislation requiring financial institutions to manage risks in areas such as data governance, operational resilience, and outsourcing.

However, the report raises concerns about regulatory overlap and the uncertainty regarding the interaction between the AI Act and sector-specific legislation. It also flags the potential limitations imposed by the General Data Protection Regulation on the use of AI in financial services, adding to speculation that data privacy regulation is in line for major reform.

Recommendations to support responsible AI adoption

ECON cautions against the adoption of an overly restrictive approach to AI deployment, warning that this could undermine the sector’s competitiveness and limit the benefits available to consumers. In its motion for a resolution, ECON recommends that the European Commission:

• provides guidance on the application of existing financial regulations to AI. This includes ensuring consistent definitions, simplifying the regulatory framework to avoid duplicative requirements, and refraining from introducing new sector-specific AI rules that could add unnecessary complexity.
• acting with the Member States, promotes consistent interpretations of regulatory requirements, avoids overly strict applications of existing sectoral rules, and focuses on tangible, operational risks rather than abstract or theoretical concerns.
• clarifies the EU AI Act's AI literacy requirements for financial services.

Authors: Fiona Ghosh, Partner; Patricia Wade, Expertise Counsel; Imene Hamdi-Cherif, Associate