Group of Seven (G7) finance leaders have pledged to take action to maintain the stability of the global financial system after recent banking turmoil and to give low- and middle-income countries a bigger role in diversifying supply chains to make them more resilient. Their communique did not mention China by name but the supply-chain language fits in with "friend-shoring" efforts by industrial democracies to work with each other to become less reliant on the Asian manufacturing powerhouse for battery minerals, semiconductors and other strategic goods. "We commit to jointly empowering low- and middle-income countries to play bigger roles in supply chains through mutually beneficial cooperation by combining finance, knowledge, and partnership, which will help contribute to sustainable development and enhance supply chain resilience globally," the G7 finance ministers and central bank governors said in the statement on Wednesday. The finance chiefs of G7 nations – Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – met on the sidelines of International Monetary Fund (IMF) and World Bank meetings in Washington, DC. They said they discussed recent financial sector developments after the failure of two United States banks and the forced sale of troubled global lender Credit Suisse. "We will continue to closely monitor financial sector developments and stand ready to take appropriate actions to maintain the stability and resilience of the global financial system," the G7 finance leaders said.

It is hard to imagine a world without the banking industry being the gatekeeper of the global financial system. If banks want to grow market share and extend their value, they have no choice but to wholeheartedly adopt data-driven enabling technologies and their acronyms: #AI, #ML, #DL, #NLP, #NLG, #RPA, #RaaS…..which I bucket as advanced analytics and decisioning. The industry is plagued with inefficiencies that will be the death of banks. Under the hood, most institutions still operate using older, siloed, and static core systems with poor quality, inconsistent, and heavily customized data. They have accumulated a decade of shelfware, are slow to change, and are barely managing their compliance obligations.

Financial services isn't ordinarily what anyone would consider a trend-driven industry. But it's a data-intensive industry, and that puts it directly in the path of disruption from artificial intelligence (AI). Wherever their strategies take them, it's becoming increasingly apparent that financial institutions will have to come to grips with AI–along with the implications AI has for safety, inclusion, employment, and the financial services value chain. AI exposes the industry to broader risks of contagion as it demands ever-tighter connections across domestic and cross-border systems. Even in today's environment, financial markets are vulnerable to herd behavior.

There's little doubt that artificial intelligence will reshape the world as we know it. It'll revolutionize the way we do business, communicate, and even raise our kids. Presumably, the benefits of AI will outweigh the bad, but a new report from the World Economic Forum (WEF) shows we might just have to weather a global crisis before we ever get the chance to find out. The problem, according to the WEF, stems from the way global financial markets are incorporating machine learning and AI. "The dynamics of machine learning create a strong incentive to network the back office," says the report's lead author, Jesse McWaters, head of the AI in Financial Services Project at WEF. "A more networked world is more vulnerable to cybersecurity risks, and it also creates concentration risks."