**5. Conclusion**

Investment in AI is one of the most essential and a core element in bank survival. Therefore, it is vital for banks to continue to deploy AI into their operations. Yet, AI suffers from a series of limitations that must be considered in assessing its use. Many studies have raised concerns about AI biasness, discrimination, violating privacy, manipulating political systems compromising national security,

economic stability, political stability, digital safety, and financial safety causing disastrous consequences from reputational damage, revenue losses, regulatory backlash to criminal investigation, ignores equality and fair treatment, difficult to evaluate decisions due to poor explainability, transparency, resulting in lack of trustworthiness, accountability and reliability [12, 20, 28, 108]. The chapter has successfully portrayed bank soundness in the face of AI through the lens of CAMELS. The taxonomy partitions challenges posed by AI into 1(C), 4(A), 17(M), 8 (E), 1(L), 2(S) distinct categories. Ironically, both AI and banks are opaque in nature and have diminished public trust in them. Governments will be held accountable once again by taxpayers if markets come to a standstill as a result of AI. As such, banks need to provide answers on how well they are protecting customer's privacy and security with a range of protocols, controls and measures. If a silver bullet is not found than either banks will have to disappear, or the world will witness yet another catastrophe created by banks but this time with the help of AI. As such, trapping banks further into the conundrum of being in between the devil and the deep blue sea.


**297**

**Author details**

**Table 1.**

Charmele Ayadurai1

1 Durham University, UK

2 Teesside University, UK

provided the original work is properly cited.

\* and Sina Joneidy2

\*Address all correspondence to: charmele.ayadurai@durham.ac.uk

© 2021 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium,

*Artificial Intelligence and Bank Soundness: Between the Devil and the Deep Blue Sea - Part 2*

• Personal, sensitive and complex matters

• Robo-advisor-incorrect risk evaluation

• Trade-off 1-Interpretable vs. precision

• Empathy, emotional quotient

*DOI: http://dx.doi.org/10.5772/intechopen.95806*

**Government Support AI & Banks**

Liquidity • Uncover crisis Sensitivity • Complex task

*Taxonomy of challenges posed by AI on bank soundness.*

Earnings • Trade-off 2- Data privacy vs. accuracy • AI backlash • customer exclusion

> • Equality Act • Honesty
