CAMBRIDGE, U.K. — Adoption of artificial intelligence across the global financial system is accelerating but remains uneven, with significant gaps emerging between financial institutions, regulators and regions, according to new research from the Cambridge Centre for Alternative Finance at the Cambridge Judge Business School.
The report, based on a global survey of hundreds of financial firms, technology providers and regulatory authorities, found that while banks and fintech companies are moving rapidly to deploy AI, regulators are lagging behind—raising concerns about oversight, systemic risk and the ability to monitor increasingly complex technologies.
The Key Findings
Key findings from the report include:
- Uneven adoption across the ecosystem: Financial institutions are adopting AI at more than twice the rate of regulators, with only about 20% of regulatory authorities reporting advanced AI use.
- Data and knowledge gaps: Just 24% of regulators currently collect data on AI deployment in the financial sector, while roughly 43% have no plans to do so within the next two years, creating what the report describes as a significant “blind spot.”
- Concentration risk: The financial sector is heavily reliant on a small number of AI providers, with roughly 69% of respondents using models from a single provider, increasing the risk of systemic vulnerabilities tied to third-party dependencies.
- Global disparity: Adoption levels vary widely by geography and institution type, with advanced economies and larger firms leading deployment while emerging markets and smaller entities face constraints in skills, infrastructure and data access.
‘Capability Gap’
The findings underscore what researchers describe as a widening “capability gap” between those building and deploying AI systems and those tasked with overseeing them.
“This empirical blind spot may undermine optimism about AI,” the report said, noting that authorities may struggle to supervise risks effectively without better data and internal capabilities.
The research also highlights growing concern over next-generation AI systems capable of autonomous decision-making, which could challenge existing governance frameworks and expose weaknesses in legacy financial infrastructure.
Recommendations for Regulators
To address these risks, the report calls for regulators to accelerate their own adoption of advanced technologies, including so-called “agentic” AI systems, while improving data collection, skills development and cross-border coordination.
The Cambridge Centre for Alternative Finance—a leading research institute focused on technology-enabled financial innovation—said its findings point to the need for a more balanced and coordinated approach to AI adoption, one that supports innovation while strengthening oversight and resilience across the global financial system.
For the full report, go here.
