Financial Services firms ‘unable to benefit from AI, Open-Source Software and Machine Learning’

Financial Services firms ‘unable to benefit from AI, Open-Source Software and Machine Learning’

New report reveals tech tools are critical for businesses, but security concerns and legacy systems are blocking progress

Financial Services firms are increasingly recognising the benefits of AI, Machine Learning and Open-Source Software (OSS), but security concerns and legacy systems are hindering progress. That’s according to specialist software consultancy, Scott Logic.

According to the 2024 State of Open Source in Financial Services report, created in conjunction with the Fintech Open Source Foundation (FINOS), the Linux Foundation, and Scott Logic, 84% of Financial Services businesses agree that OSS delivers substantial business value.

Respondents also revealed that AI and Machine Learning are growing in value for the sector, with 45% of those surveyed indicating their importance for the future of financial services, up by 10% from last year.

However, the report also revealed that concerns over security in such a highly regulated sector is hindering progress, with 47% of those in Financial Services claiming that investing in secure software development practices and legal compliance would increase their organisation’s OSS usage.

As Colin Eberhardt, CTO at Scott Logic and a co-author of the report, explained, this, combined with the issue of legacy systems, needs to be addressed if firms are able to reap the real benefits of OSS, AI and ML:

“It’s clear that the Financial Services industry can benefit from innovative technology such as Open-Source Software, AI and Machine Learning and it is certainly encouraging to see this increasingly recognised by leaders in the sector. However, given the highly regulated nature of Financial Services and the understandable concerns around data security, many firms aren’t yet reaping the rewards.

“A careful approach to ensure any new tools are compliant with industry regulations and standards is certainly needed. However, one critical point that is also hindering businesses in the sector from truly benefitting from the potential of OSS and other tools is the issue of legacy IT systems which simply can’t accommodate the changes required. Replacing these tech stacks is a monumental job for many, particularly those firms that have had systems in place for decades. It will require brave and bold leadership, but it is, without doubt, a necessity.”