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Why Some Financial Firms Are Wary of AI

By Michael S. Fischer

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Nearly all financial services leaders in a recent Ernst & Young survey said that their organizations are deploying some form of artificial intelligence — and all are either already using generative AI within their businesses or plan to do so.

But amid these universal adoption plans, about a fifth of respondents said they are nervous or skeptical about the potential effect of GenAI on their organizations. A similar percentage does not feel confident that their organizations are well positioned to take advantage of the potential benefits of AI. 

Twenty-four percent of insurance leaders fell into the nervous or skeptical category, followed by 21% of those in wealth and asset management, and 17% in banking and capital markets.

“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,” David Kadio-Morokro, EY Americas’ financial services innovation leader, said in a statement. 

“We like to take an ‘innovation intelligence’ approach to putting artificial intelligence to work — planning, education and an agile test and [learning] strategy for implementation are imperative for those looking to make the most of AI’s potential benefits,” Kadio-Morokro said.

Wakefield Research conducted the survey in late August among 300 executive directors, managing directors or higher at financial organizations with $2 billion or more in revenue.

AI Outlook and Implementation

Fifty-five percent of respondents expressed support and optimism about using AI in their organizations. Long term, 77% of executives viewed GenAI as an overall benefit to the financial services industry in the next five to 10 years. 

Leaders saw a particular opportunity in customer and client experience, with 87% saying they believe that AI can bring improvements to this space.

Financial services leaders face hurdles in taking advantage of and deploying GenAI, according to the survey. Asked about the challenges that financial organizations will encounter, they listed these barriers:

  • Lack of proper data infrastructure: 40%
  • Lack of clear commitment from leadership: 36%
  • Lack of technology infrastructure: 35%
  • Unclear governance and ethical framework: 33%

“Generative AI holds the potential to revolutionize a broad array of business functions,” Sameer Gupta, leader of EY Americas’ financial services organization advanced analytics, said in the statement. “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.”

EY Americas said that if organizations truly want to take advantage of AI’s benefits, they must better understand and improve their data infrastructure. The survey reflects this, with leaders citing the following ways that AI will benefit the industry:

  • Risk reduction from data processing: 46%
  • Creation of new offerings and hyper-personalized marketing: 38%
  • Improved data management process and accuracy: 37%

“Focusing on the human role of AI implementation is just as important as technology infrastructure,” Michael Fox, EY Americas’ financial services accounts managing partner, said in the statement.

“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,” Fox added.

Plus, firms that “act now with investments in training, talent and infrastructure development … will reap the benefits that AI offers their industry … and will likely find themselves to be a step ahead of their peers,” he explained.

(Credit: NicoElNino/Adobe Stock)

Michael S. Fischer

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