Artificial intelligence (AI) will have a major impact on the financial services industry within the next two years, according to new research by the Cambridge Centre for Alternative Finance (CCAF) and the World Economic Forum.
Transforming Paradigms: A Global AI in Financial Services Survey found that 85% of financial services firms have already implemented AI in some way and nearly two-thirds (64%) expect to be mass adopters of AI in just two years compared to only 16% doing so today.
More than three-quarters (77%) of the respondents anticipate AI to have high or very high strategic importance to their business within two years.
These firms expect to use AI for purposes beyond cost reduction, including revenue generation, process automation, risk management, customer service and client acquisition. Respondents believe there will be a significant gap between firms that quickly implement AI and firms that lag behind.
“The comprehensive and global study confirms that AI is affecting the financial system at an accelerating pace,” commented 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.”
The report highlighted a difference between how fintechs and incumbent firms are expecting to use AI in their businesses. Traditional financial services players are predominantly focusing on harnessing AI to improve existing products, while a higher share of fintechs are creating AI-based products and services, employ autonomous decision-making systems, and rely on cloud-based offerings.
Novel insights are increasingly being gained by using AI to analyse new or alternative datasets such as social media and geo-location data, with 60% of respondents making use of such data in their AI applications.
“As the technologies start to disrupt business models and transform business functions, it’s increasingly important for organisations to focus on the long-term implications of AI adoption: trust in AI, workforce transformation, and how customer and stakeholder value can be radically reimagined,” said Nigel Duffy, EY Global Artificial Intelligence leader.
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