The rise of advanced artificial intelligence (AI) in the financial industry has brought numerous benefits such as improved document analysis and code generation. However, one unintended consequence is the increased carbon dioxide emissions.

Tech providers are recognizing this issue and proposing solutions, such as shifting work to carbon-neutral cloud providers and colocation facilities powered by clean energy. Banks, like other companies, consume significant amounts of energy, mostly driven by their use of technology. For example, the banking industry alone consumes about half the energy used to mine bitcoin, estimated at 238.92 terawatt hours per year. In finance, IT accounts for 46% of direct and indirect emissions.

The growing use of AI and other advanced technologies is further driving up energy consumption. Training a GPT-3 engine, for example, consumes a staggering amount of water, equivalent to the water used to produce 370 BMWs, as water is used to cool the servers.

Approximately 2% to 4% of global emissions are produced by the IT industry, placing it on par with the airline industry in terms of carbon footprint. As more companies adopt AI, the demand for data increases, leading to higher energy consumption. Financial institutions, especially, rely on AI for risk assessment, fraud detection, and analytics, requiring constant processing of vast amounts of data.

However, some banks and their vendors are taking responsibility and implementing measures to reduce their energy consumption. Many banks view sustainability as an opportunity and see it as their obligation to contribute to a greener environment. European banks, in particular, prioritize carbon emissions more than their American counterparts.

Various strategies are being employed to reduce energy consumption. One approach is to shift computing cycles to carbon-neutral platforms such as Microsoft Azure. By migrating to these platforms, banks can significantly reduce their carbon emissions. Another strategy involves optimizing power consumption by relocating workloads based on factors such as time of day, geographic location, and power sources. This allows companies to leverage the availability of clean energy sources like wind and solar power.

In order to effectively manage energy consumption, companies like Cirrus Nexus provide software solutions that help identify optimal locations and timing for running data workloads. By analyzing weather patterns and energy availability, these tools enable companies to make informed decisions and minimize carbon emissions.

Overall, the financial industry is embracing the challenge of reducing its carbon footprint. By adopting sustainable practices, leveraging carbon-neutral platforms, and optimizing energy usage, banks can contribute to a greener future while continuing to benefit from AI technology.

LeackStat 2023