AI expected to lower financial services' business costs: Report
About 15% of insurers and banks are using AI “extensively” and only half are using it at all. However, 86% of thems say they plan to increase AI-related investments over the next five years, with about one-third expecting between 51% and 75% of their workloads to be supported by AI technologies in five years’ time.
That’s according to the report, “The Road Ahead: Artificial Intelligence and the Future of Financial Services,” conducted by The Economist Intelligence Unit (EIU) and based on a survey of 200 business executives and C-suite leaders at investment banks, retail banks, and insurance companies worldwide.
“The research shows the strides that are already underway and the path forward that will boost the industry to the next phase of AI adoption. Like any potentially transformational technology, it will not be a path without risks, but the impact on the future of banking and insurance is clear and promises to deliver a world of value,” says Dr. Katya Kocourek, Managing Editor, Thought Leadership at The Economist Group.
The report notes that over the next 5 years, respondents predict that AI will lower their cost base (34%), spur new products and services (27%), open up new markets or industries (25%), and pave the way for innovation (25%).
Forty percent cite security as a concern about adoption, yet half (52%) are confident about their preparedness to address AI-associated risks like security, and 55% have developed policies, procedures and oversight processes for AI-based automation.
The financial sercives industry is at a halfway point when it comes to upskilling their employees, with 49% of respondents saying training initiatives for employees to better understand AI are currently in place; another 42% have plans to implement such training.
AI will transform their business in a number of ways over the next five years, including spurring new products and services (27%), opening up new markets or industries (25%), and paving the way for innovation (25%). About one-third (29%) of respondents expect between 51% and 75% of their workloads to be supported by AI technologies in five years’ time.
“AI is the new growth engine, and the key to unlocking its potential requires investing in talent. Financial services companies must train and reskill employees to capitalize on the productivity and innovation gains made possible by AI,” adds Sudheesh Nair, CEO of ThoughtSpot.