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Historically, the finance industry has been an early adopter of many technological advancements, from electronic systems to Big Data. The advent of generative artificial intelligence (GenAI), such as large language models (LLMs), has represented a breakthrough in the evolution of AI innovation and captured public attention and renewed interest by financial market participants, financial consumers and policymakers. The integration of AI has the potential to rapidly transform the global financial sector by offering market participants and consumers innovations that enhance efficiency and productivity. Reduced costs could improve product and service quality. However, alongside these benefits, AI may also intensify existing risks and introduce new challenges. In this article, we first provide an overview of the main AI applications in financial markets and the related opportunities for market participants, consumers and regulators. Then, we analyse the main risks created or amplified by the use of AI in financial markets. Finally, we briefly describe the existing regulatory framework. JEL classification: G28, G32, O33.