London-headquartered Ernst & Young (EY US) this week released its "2023 Financial Services GenAI Survey."

A new report by Ernst & Young (EY US) shows that 99 per cent of financial services leaders, including wealth and asset management executives, believe that their organizations are deploying artificial services (AI) in some way.

Respondents said that they are either already using, or planning to use, generative AI (GenAI) specifically within their organization.

The survey reveals that 91 per cent of wealth and asset management executives believe generative AI can improve the experience that customers and clients have with their organizations.  Whilst 84 per cent of wealth and asset management executives believe that the benefits of generative AI outweigh the risks.

Wakefield Research conducted the survey between August 15 to 28, 2023, among 300 executive directors, managing directors or higher at financial organizations with $2 billion or more in revenue. Financial organizations are defined as banking and capital markets, insurance, and wealth and asset management industries – 100 responses were collected from each sector.

Amid the universal adoption plans, just over one in five respondents said they are nervous or skeptical about the potential impact of GenAI on their organization, the survey shows. That same percentage also does not feel confident that their organizations are well-positioned to take advantage of the potential benefits AI might bring.

Insurance is ranked highest in the nervous or skeptical category (24 per cent), while banking and capital markets leaders had the lowest levels of skepticism (17 per cent), followed by wealth and asset management (21 per cent), the firm said in a statement.

“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.

“We like to take an ‘innovation intelligence’ approach to putting artificial intelligence to work – planning, education and an agile test and learn strategy for implementation are imperative for those looking to make the most of AI’s potential benefits,” he continued.

Optimism
The majority of respondents felt positive about AI, with more than half (55 per cent) saying they felt supportive and optimistic about using AI in their organization. The long-term sentiment is even more optimistic, with 77 per cent of executives viewing GenAI as an overall benefit to the financial services industry in the next 5 to 10 years, the firm added. Leaders see a particular opportunity in customer and client experience, with 87 per cent stating that they believe AI can bring improvements to this space.

Annabelle Bryde, managing director and head of UK Private Bank and Crown Dependencies at Barclays Private Bank, also thinks that AI will play an important role in wealth management. Benefits of AI range from automating repetitive tasks, providing data-driven advice in specific areas such as portfolio optimization, risk management and tax analysis. See more here. 

When asked about the challenges financial organizations will face in taking advantage of GenAI, the EY survey shows that 40 per cent of respondents believe that there is a lack of proper data infrastructure and 35 per cent a lack of technology infrastructure. Thirty-six per cent of respondents also said there is a lack of clear commitment from leadership and 33 per cent said there is unclear governance and ethical framework.

“Generative AI holds the potential to revolutionize a broad array of business functions,” Sameer Gupta, EY Americas Financial Services Organization Advanced Analytics Leader, said. “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. Our role is to support financial services organizations in making sure their legacy data and technologies are unimpeachable before adding AI applications on top of existing systems.”

If organizations want to take advantage of AI’s benefits, a major factor in their success will be a better understanding of, and improvements in, their data infrastructure, the firm continued.

“Focusing on the human role of AI implementation is just as important as technology infrastructure,” EY Americas Financial Services Accounts managing partner Michael Fox added. “Our data showed that 44 per cent of leaders cited access to skilled resources as a barrier to AI implementation, but there’s only so many already skilled professionals in existence. Part of the solution is deploying upskilling programs today that can equip your current workforce with the skills they need to help leaders and their business thrive in an increasingly AI-centric world.” 

The firm believes that implementing AI in financial services will change the way sector leaders learn, serve customers, process data and manage risk. Organizations that act now with investments in training, talent and infrastructure development while putting proper governance and controls in place will reap the benefits that AI offers their industry, continue driving the business case for investment and will likely find themselves to be a step ahead of their peers, the firm concluded.

EY, one of the big four accounting firms, provides assurance, consulting, law, strategy, tax and transactions services to its clients.