These organizations hope to utilize AI for purposes beyond cost reduction
A survey has revealed that around 64% of financial service leaders are expected to mass adopt Artificial Intelligence (AI) within two years.
The World Economic Forum (WEF) and the Cambridge Centre for Alternative Finance (CCAF) jointly released the survey titled Transforming Paradigms: Global AI in Financial Services Survey, according to a media release on WEF's website on Tuesday
Over 150 senior financial services executives in both fintech and incumbent financial institutions responded to a range of questions on the impact that AI is expected to have on the industry.
However, from all the responses, it is surmised that there will be a significant gap between organizations that quickly employ AI and those that lag behind.
According to the survey, these organizations hope to utilize AI for purposes beyond cost reduction, including revenue generation, process automation, risk management, customer service, and client acquisition.
“The comprehensive and global study confirms that AI is affecting the financial system at an accelerating pace,” says Matthew Blake, Head of Financial and Monetary Systems at the World Economic Forum.
“With the rising trend of mass adoption of the technologies throughout financial services, those firms that implement AI quickly look set to sprint ahead,” he added, the release said.
The survey report also revealed that with most executives willing to mass adopt AI, the fears surrounding AL bias and market-wide risks are likely to worsen within the sector.
Although the outcome of the responses is slightly concerning, 70% of respondents also believe they are at least somewhat prepared to mitigate AI bias risks.
Generally, firms using Risk and Compliance teams in AI implementation are most certain about their chances.
Moreover, the report detected a significant distinction between how fintechs and incumbent firms are hoping to use AI in their businesses.
For instance, traditional financial services players mostly focus on using AI to improve existing products, whereas a high number of fintechs are creating AI-based products and services, adopting autonomous decision-making systems, and depending on cloud-based offerings.
“This empirical research underscores the growing importance of harnessing AI in financial services,” says Bryan Zhang, Executive Director of the Cambridge Centre for Alternative Finance, “which gives new impetus for firms to develop a holistic and future-proof AI strategy.”
This survey highlights the remarkable shift AI is bringing to the financial services industry. As more businesses start to use AI to increase productivity and achieve scale, the industry is likely to go through a transformation.
Overall, the survey fieldwork garnered responses from 151 organizations across 33 jurisdictions. China, the United States (US) and the United Kingdom (UK) are the top three jurisdictions represented in the survey sample, with 17%, 15% and 14% of respondents respectively.
Financial Services firms with headquarters in Europe represent 36% of all survey entries, which equals with the Asia Pacific region, followed by North America (19%), Middle East & Africa (7%), and Latin America (2%).