Use cases and considerations for rapidly and responsibly adopting AI, digital assets, and blockchain in financial services

Talking points

• Artificial intelligence (AI), digital assets, and blockchain in financial services are quickly transforming every sector of the industry.
• These disruptive technologies bring new risks but also opportunities for leading financial service organizations to more rapidly move from ideation to implementation to transformation.
• Deloitte can advise organizations on building governance, controls, and compliance frameworks to seize opportunities and manage risk.

Disruptive innovation is sweeping through the financial services industry (FSI) at an unprecedented pace. What’s fueling this transformation? At the heart of the change are rapidly advancing technologies like artificial intelligence (AI), blockchain, and digital assets. These innovations are creating exciting new opportunities—and, at the same time, introducing new risks and changing others, both of which FSI organizations must navigate.

One risk worth noting is how quickly technology is evolving. This rapid rate of change creates challenges for FSI organizations to understand and adopt new technologies in time to lock in a competitive advantage. And with speed and constant change, there’s also the risk of overlooking governance, controls, and regulatory frameworks needed to harness these innovations responsibly.

Understanding the opportunities

Deloitte’s FSI Predictions 2025 report aims to bridge the gap by showcasing how these technologies are being applied across financial services sectors. I also had a chance to sit down recently with Roger G. Arrieux, Jr. (Audit & Assurance partner, at Deloitte & Touche LLP), Deloitte’s US East Region market leader and New York managing partner, to discuss the massive disruption taking place in FSI and the timely opportunities it’s creating to develop transformative new financial services.

In the sections ahead, we’ll explore some of the most noteworthy financial services technology trends and use cases—and delve into the governance, regulatory, and control considerations foundational to bringing these applications to life.

Banking and capital markets

Blockchain-based multibank cross-border payment networks: Tokenized currency networks built on blockchain are transforming cross-border payments, with stablecoins and tokenized commercial bank deposits set to become the main digital cash instruments. By 2030, Deloitte projects one in four large-value international transfers will settle on these platforms, cutting transaction costs by 12.5% and saving businesses more than $50 billion. Banks should assess the operational impact of shifting transaction flows to blockchain exchanges and develop value-added services, backed by a strong governance framework, to maintain and multiply corporate relationships.

Commercial real estate

Tokenization and fractional real estate ownership: Tokenization uses blockchain to divide a property such as an office building into fractional shares, represented as digital tokens that can be securely traded online. Key applications include tokenized private real estate funds, loan and securitization ownership, and undeveloped or under-construction projects. This approach creates unprecedented liquidity and democratizes commercial real estate investment, promising to transform the sector. Deloitte estimates that tokenized real estate will reach $4 trillion by 2034, up from less than $0.3 trillion in 2024. Real estate firms should assess complex legal, regulatory, and technical challenges of moving to tokenized real estate.

Insurance

AI and fee-based risk management: Property and casualty (P&C) insurers are using AI to launch fee-based risk management services built on a “predict and prevent” model. These offerings, including data-sharing and white-label partnerships, help drive growth and protect customers amid rising climate risks. Deloitte predicts US P&C insurers’ fee-based revenue will rise from $21.6 billion in 2023 to $49.5 billion by 2030. Insurers should develop more advanced predict-and-prevent services and strengthen their AI risk management and governance.

AI for fraud detection: AI-powered multimodal technologies are set to enhance fraud detection in the P&C insurance sector. By using AI to integrate real-time analysis, insurers could reduce fraudulent claims and save between $80 billion and $160 billion by 2032. AI can analyze text, images, audio, video, and sensor data to identify patterns and anomalies, improving the investigative process. To minimize AI risk, insurers should combine AI with human oversight to effectively detect and prevent fraud.

Investment management

AI for active ETF management: The shift from mutual funds to active exchange-traded funds (ETFs) is accelerating. Active ETFs offer transparency, flexibility, tax efficiency, and lower costs, combining active management with ETF benefits. AI-driven platforms deliver adviser-led investment advantages without traditional adviser fees. Deloitte forecasts US active ETF assets will grow from $856 billion in 2024 to $11 trillion by 2035—a 13-fold increase fueled by demand for lower expenses and stronger performance data. Investment managers should expand active ETF offerings and build robust authorized participant networks and governance frameworks to capture this growth.

Operational, governance, and compliance considerations

Whether you’re implementing stablecoins for cross-border payments, tokenizing commercial real estate, or leveraging AI for wealth and risk management, navigating operational, compliance, and risk challenges can be complex. Below are some key governance, risk, and control considerations to guide your approach:

• Governance, risk, and controls. Implementing AI and blockchain solutions for financial services requires a robust governance framework with effective controls to help ensure data accuracy and mitigate security and accountability risks. Human oversight throughout is the key to transparency and trustworthiness.
• Operational and technical support. Management of digital assets such as tokens requires specialized support in technical accounting, valuation, reconciliation, tracking, financial reporting, and so on.
• Legal and compliance. Legal and compliance considerations for digital assets like stablecoins and tokens include navigating smart contracts, specialized financial reporting, and regulatory requirements such as know your customer/anti-money laundering. AI also introduces specific audit documentation and testing requirements.

What role can Deloitte play?

Deloitte can advise financial services organizations on the governance, risk, and compliance frameworks needed to adopt innovative technology responsibly and effectively in this rapidly changing environment. Our Audit & Assurance specialists are skilled and experienced in financial
services AI adoption, blockchain applications, GRC frameworks, industry standards, and regulatory requirements. To learn more, read our FSI Predictions 2025 report, and visit our FSI Audit & Assurance services page to reach out to our team.

The services described herein are illustrative in nature and are intended to demonstrate our experience and capabilities in these areas; however, due to independence restrictions that may apply to audit clients (including affiliates) of Deloitte & Touche LLP, we may be unable to provide certain services based on individual facts and circumstances.

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.