AMSTERDAM, June 7 (Reuters) - The boom in artificial

intelligence will increase banks' dependence on big U.S. tech

firms, creating new risks for the industry, European banking

executives said.

Excitement around using artificial intelligence (AI) in

financial services - widely used already for detecting fraud and

money-laundering - has soared since the launch of OpenAI's viral

chatbot ChatGPT in late 2022 as banks examine ways to deploy

generative AI.

But at a gathering of fintech executives in Amsterdam this

week, some expressed concerns that the amount of computing power

needed to develop AI capabilities would make banks rely even

more on small number of tech providers.

ING's chief analytics officer, Bahadir Yilmaz, who

is in charge of the Dutch bank's AI work, told Reuters he

expected to rely on Big Tech companies "more and more going

forward", for infrastructure and machinery.

"You will always need them because sometimes the machine

power that is needed for these technologies is huge. It's also

not really feasible for a bank to build this tech," he said.

Banks' dependency on a small number of tech companies was

"one of the biggest risks", ING's Yilmaz said, emphasising that

European banks in particular needed to ensure they could move

between different tech providers and avoid what he called

"vendor lock-in".

Britain last year proposed rules to regulate financial

firms' heavy reliance on external technology companies, such as

Microsoft ( MSFT ), Google, IBM ( IBM ) and Amazon. Regulators are worried that

problems at a single cloud computing company could potentially

bring down services across many financial institutions.

"AI requires huge amounts of compute and really the only way

that you're going to be able to access that compute (computing

power) sensibly is from Big Tech," Joanne Hannaford, who leads

technology strategy at Deutsche Bank's corporate

bank, told an audience at the Money20/20 conference earlier this

week.

AI was top of the agenda at the Amsterdam conference.

The CEO of French AI startup Mistral AI, seen as France's

answer to OpenAI, told attendees there were "synergies" between

its GenAI products and financial services.

"We see a lot of opportunities in creating analysis and

monitoring information ... which is really something that

bankers like to do," Arthur Mensch said.

ING is testing an AI chatbot currently used for 2.5% of

incoming customer service chats. Asked how long it would be

until the chatbot could handle half or more of customer service

conversations, Yilmaz said within a year.

In its first statement on AI, the European Union's

securities watchdog said last week that banks and investment

firms cannot shirk boardroom responsibility and have a legal

obligation to protect customers when using AI. It warned that

the technology is likely to have significant impact on retail

investor protection.