The Main Challenges and Risks of Adopting AI in the UK Fintech Sector

Abstract

Artificial intelligence (AI) has become a pivotal force in transforming the financial technology (fintech) industry, particularly in the UK, over the past ten years. The implementation of AI in fintech presents several challenges, notably data privacy and security concerns due to the sensitive nature of financial data. The purpose of this study was to examine the main challenges and risks of adopting AI in the UK fintech sector. To achieve these objectives, a qualitative research approach was employed, utilizing document analysis as the primary data collection method. The study examined case studies of UK fintech companies that have attempted to integrate AI into their operations between 2013 and 2023. Content analysis was conducted on the collected data to identify recurring themes and patterns related to AI adoption challenges. The results illustrate that even though the UK fintech industry is currently experiencing rampant AI uptake, the industry encounters enormous problems that inhibit the effective use of AI, including technological restrictions, resistance from within organizations, complications from regulations, as well as ethical issues, among the key challenges identified. The study herein also reveals interconnections between these challenges in terms of AI adoption producing less than desirable results. Moreover, this study emphasizes leadership and strategic vision as pivotal for addressing these challenges; hence, there is a need for solid regulatory frameworks that foster innovation while protecting moral principles.