CCR2 Communications
Artificial intelligence: taking the next step
Artificial intelligence will shift from cost reduction to revenue generation in the financial-services industry, according to a new study
According to a newly released global artificial intelligence (AI) in financial services survey by the Cambridge Centre for Alternative Finance (CCAF) at Cambridge Judge Business School, University of Cambridge, and the World Economic Forum, AI is expected to become an essential business driver across the financial-services industry in the short run, with 77% of respondents anticipating AI to possess high or very high overall importance to their businesses within two years and 85% of the surveyed financial firms having already implemented AI in some way.
Revenue streams The study, launched in February at an event in London, was recently highlighted at the World Economic Forum’s Annual Meeting in Davos and was co-sponsored by EY and Invesco. It also shows financial- services organisations will move away from mainly leveraging AI for cost reduction purposes to using it for new revenue streams. Nearly two-thirds (64%) of respondents expect to become AI mass adopters within
two years, simultaneously using AI for revenue generation, process automation, risk management, customer service, and client acquisition within two years, compared to a current figure of just 16%. The study is based on 151 responses
from 33 countries, with fintech firms and incumbent financial institutions representing 54% and 46% of the sample, respectively, providing a broad view of how AI will affect financial services in the next two to 10 years. Respondents included C-level executives
and other relevant senior management across different financial services sectors. The research was jointly conducted in second and third quarters of 2019 by the CCAF and the World Economic Forum.
Hurdles to adoption The study further discussed perceived hurdles of AI adoption, emerging firm-level and market-level risks, as well as regulatory implications. The study also revealed that surveyed incumbent financial service providers
Nearly two-thirds (64%) of respondents expect to become AI mass adopters within two years, simultaneously using AI for revenue generation, process automation, risk management, customer service, and client acquisition within two years, compared to a current figure of just 16%
expect AI to replace nearly 9% of all jobs in their organisation by 2030 while fintechs anticipate AI to expand their workforce by 19% during the same period. Matthew Blake, head of financial and
monetary systems at the World Economic Forum, said: “The comprehensive and global study affirms AI is impacting the financial system at an accelerating pace. With the rising trend of mass adoption of the technologies throughout financial services, there will be a significant gap between firms that quickly implement AI and firms that lag behind.” Bryan Zhang, executive director of the
CCAF said: “This empirical research underscores the growing importance of harnessing AI in financial services, which gives new impetus for firms to develop a holistic and future-proof AI strategy.” Nigel Duffy, the global artificial
intelligence leader at EY, said: “AI is transforming the financial-services industry and we can expect widespread adoption to continue. “As the technologies give way to new
revenue streams and transform business functions, it is increasingly important for
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www.CCRMagazine.com February 2020
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