AI and Cybersecurity: The Twin Engines Driving Global Finance

By Tracy Lai - Partner Lystar Group 

As fintech scales across borders, innovation and trust will depend on mastering both intelligence and defense. Two complementary technologies, AI and cybersecurity, are emerging as the twin engines of modern finance. AI fuels efficiency and personalization, while cybersecurity preserves resilience and trust.

Artificial intelligence has become the defining technology of our time, reshaping industries worldwide. Nowhere is this more evident than in financial technology, which resides at the intersection of capital, data, and trust. This position places fintech closer to AI innovation as well as nefarious actors seeking to exploit it.

Two complementary technologies, AI and cybersecurity, are setting the pace for global capital markets. AI fuels efficiency and personalization, while cybersecurity preserves resilience and trust. Together, they are emerging as the twin engines of modern finance.

AI Transforming Fintech

AI has moved quickly from pilot projects to core infrastructure across financial services in numerous ways, including the following examples:

• Customer Interaction: Bank of America’s Erica chatbot has handled more than a billion customer interactions, offering real-time insights on bills, savings, and spending.

• Personalized Investment: Robo-advisors such as Betterment scale tailored portfolios once available only to high-net-worth clients.

• Credit and Risk: AI taps alternative data to extend credit to individuals and small businesses underserved by traditional scoring.

• Compliance: KPMG reports that nearly nine out of ten U.S. finance teams now use AI, with most projects meeting or exceeding ROI.

As the global market continues to expand, global AI spending in finance, which reached $45 billion in 2024, is expected to hit $73.4 billion by 2025.

Generative AI in Finance

Generative AI is redefining workflows across the industry, enhancing efficiency, transparency, and customer trust. Conversational models now manage complex client queries with near-human fluency. Automated drafting of contracts,

regulatory filings, and investment reports, frees up human teams for higher-value work. AI-powered simulations are supporting compliance and portfolio decisions with real-time, data-driven insights.

Cybersecurity Imperative

As digital adoption accelerates, financial firms face a widening attack surface. The sector recorded a 53% rise in cyberattacks in 2023 compared with 2022, and a recent survey found that 77% of institutions experienced an attack last year. The IMF estimates $12 billion in reported losses from cyber incidents over the past two decades, with $2.5 billion

since 2020 alone. Firms are adapting. “Zero trust” security models, where no user or device is automatically trusted, are gaining traction. Biometrics are also on the rise, with payment cards that use fingerprints instead of PINs and voice recognition for banking access. The global biometric payments market, valued at $8.6 billion in 2023, is projected to reach $34.8 billion by 2032.

AI plays a critical role in defense. Advanced models scan transactions and login behavior in real time, identifying anomalies invisible to legacy systems. But the same technology is being weaponized by adversaries. AI-generated phishing campaigns and adaptive malware point to an emerging “AI vs. AI battleground” in financial security.

The Cross-Border Challenge

The next phase of fintech will be defined not just by innovation, but by how firms secure it across borders. Finance is inherently global—capital flows and digital payments move seamlessly between markets. Yet cybersecurity standards remain fragmented, with each jurisdiction imposing its own frameworks.

This patchwork creates systemic risk. A fintech may build robust defenses in one market, but if a partner operates under weaker standards elsewhere, the entire ecosystem is exposed. A breach in one geography can ripple globally, undermining trust across networks. Regulators are beginning to respond. In Europe, the proposed AI Act would impose new requirements for risk management and algorithm auditing. In the U.S., the SEC has warned firms not to rely exclusively on algorithms for trading and compliance. Oversight will only intensify as technologies mature.

Leaders will treat cybersecurity as a cross-border capability—investing in adaptive, AI-driven defenses while also aligning with diverse regulatory regimes. Building trust across fragmented systems will require greater collaboration among fintechs, regulators, and infrastructure providers.

Conclusion

AI is transforming fintech from the inside out, driving efficiency, personalization, and smarter decision-making. But with this transformation comes heightened vulnerability. The firms that will lead the next era of global finance are not those that adopt AI the fastest, but those that embed cybersecurity as deeply as innovation itself.

In today’s connected economy, innovation without security is reckless, but security without innovation is obsolescence. The future of fintech will belong to those who master both AI and cybersecurity, inseparable engines of growth and trust.