Artificial intelligence (AI) and environmental, social, and governance (ESG) are prominent themes in financial services, but the sector is seeking clearer regulations to fully harness their potential. DLA Piper’s report, Financial Futures: Disruption in Global Financial Services, shows optimism, with 80% of respondents confident about future growth, especially in the UK (93%) and US (90%). Key growth drivers include technology (71%), new products (55%), and changing consumer behaviors (38%).

However, regulatory complexity is a challenge, with 58% citing tech regulations as a global issue and 73% feeling current rules stifle innovation. AI, seen as transformative by 86%, is also viewed as a challenge by 53% of firms. Meanwhile, 46% aim to lead in ESG, despite concerns about regulation and compliance.

DLA Piper’s survey highlights that while firms recognize the advantages of AI—such as managing regulatory compliance (63%) and detecting fraud (62%)—only 39% are actively hiring AI specialists to maximize these opportunities. Ethical AI remains a concern, with just 56% of organizations developing frameworks to ensure responsible implementation.

Regarding ESG, the desire to lead in sustainability is evident, with 46% of businesses aspiring to be innovators in this space. However, many express the need for clearer ESG regulations, with 56% wanting more guidance to achieve their goals. The pressures of reputational risk and regulatory compliance drive most organizations to engage in ESG initiatives, with 70% citing reputational risk as a major concern.

Mark Dwyer from DLA Piper emphasizes the importance of proactive planning in both AI and ESG. He states, “Leaders must define clear strategies to navigate the challenges and opportunities presented by these trends, as both AI innovation and ESG compliance are vital for long-term success in the financial sector.”

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Financial Services Calls for AI and ESG Regulations to Realise Benefits, Says DLA Piper

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