One in five are not confident that their organizations are well-positioned to take advantage of the potential benefits AI might bring
Ernst & Young LLP (EY US) released its 2023 Financial Services GenAI Survey. Nearly all (99%) of the financial services leaders surveyed reported that their organizations were deploying artificial intelligence (AI) in some manner, and all respondents said they are either already using, or planning to use, generative AI (GenAI) specifically within their organization.
Amid these universal adoption plans, just over one in five respondents said they are nervous or skeptical about the potential impact of GenAI on their organization. That same percentage also does not feel confident that their organizations are well-positioned to take advantage of the potential benefits AI might bring. Insurance is ranked highest in the nervous or skeptical category (24%), while banking and capital markets leaders had the lowest levels of skepticism (17%), followed by wealth and asset management (21%).
“While there’s a whole world of possibilities and efficiencies AI can create for financial services in areas ranging from data analysis to customer service optimization, blind optimism and hype around the technology can ultimately have a counterproductive impact on a business,” says David Kadio-Morokro, EY Americas Financial Services Innovation Leader. “We like to take an ‘innovation intelligence’ approach to putting artificial intelligence to work — planning, education and an agile test and learn strategy for implementation are imperative for those looking to make the most of AI’s potential benefits.”
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AI Outlook: Optimism Now and in the Future
The majority of respondents felt positive about AI, with more than half (55%) saying they felt supportive and optimistic about using AI in their organization. The long-term sentiment is even more optimistic, with 77% of executives viewing GenAI as an overall benefit to the financial services industry in the next 5-10 years. Leaders see a particular opportunity in customer and client experience, with 87% stating that they believe AI can bring improvements to this space.
AI Implementation: It’s Time to Get Back to Basics
Taking advantage of, and deploying, GenAI is not without its hurdles. When asked about the challenges financial organizations will face in taking advantage of GenAI, leaders ranked the following as top barriers:
- 40% said lack of proper data infrastructure and 35% lack technology infrastructure
- 36% said lack of clear commitment from leadership
- 33% said unclear governance and ethical framework
“Generative AI holds the potential to revolutionize a broad array of business functions,” says Sameer Gupta, EY Americas Financial Services Organization Advanced Analytics Leader. “With each new wave of AI and analytic innovation, it becomes increasingly clear how important it is to have a tech stack with a solid foundation. Our role is to support financial services organizations in making sure their legacy data and technologies are unimpeachable before adding AI applications on top of existing systems.”
If organizations truly want to take advantage of AI’s benefits, a major factor in their success will be a better understanding of, and improvements in, their data infrastructure. The survey reflects this, with leaders citing the following as the top three ways AI will benefit the financial services industry:
- 46% said risk reduction from data processing
- 38% said creation of new offerings and hyper-personalized marketing
- 37% said improving data management process and accuracy
Winning the (AI) Talent Battle
“Focusing on the human role of AI implementation is just as important as technology infrastructure,” says EY Americas Financial Services Accounts Managing Partner Michael Fox. “Our data showed that 44% of leaders cited access to skilled resources as a barrier to AI implementation, but there’s only so many already skilled professionals in existence. Part of the solution is deploying upskilling programs today that can equip your current workforce with the skills they need to help leaders and their business thrive in an increasingly AI-centric world.”
Implementing AI in financial services will undoubtedly change the way sector leaders learn, serve customers, process data and manage risk. Organizations that act now with investments in training, talent and infrastructure development while putting proper governance and controls in place will reap the benefits that AI offers their industry, continue driving the business case for investment and will likely find themselves to be a step ahead of their peers.
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