Most insurance and banking companies are incorporating artificial intelligence (AI) into their workflow, but obstacles remain, according to a new report.
ADVERTISEMENTThe UK’s financial leaders are coming under significant pressure to rapidly implement artificial intelligence into their businesses.
This is according to a new report, released on Monday by digital consulting and analytics company EXL, based on surveys from 64 senior figures in the UK’s insurance and banking industries.
Amongst respondents, 86% said their firms had invested more than £7.9 million (€9.25 million) in artificial intelligence over the past fiscal year, with 35% reporting investment of more than £39 million (€45.7 million).
Yet as companies scramble to stay ahead of the curve, EXL showed that they sometimes compromise the quality of transformations in the name of speed.
“Our findings demonstrate that industry leaders recognise the transformative potential of AI for their businesses,” said Kshitij Jain, practice head of EMEA analytics and global chief strategy officer at EXL.
“The risk is that mounting pressure can lead to investment that isn’t properly thought through. A need to move quickly can mean ensuring operations are truly data driven gets de-prioritised, and this can be a costly mistake,” he explained.
When a company employs a data-driven approach, it means it makes strategic decisions based on data analysis and interpretation.
Of the firms surveyed, almost half (47%) confirmed their organisation is “minimally data-driven”, meaning that if artificial intelligence is incorporated into tasks, it is likely to be less effective.
Focused initiatives reap rewards
EXL created two separate groupings to study the rollout of AI, which they named “leaders” and “strivers”.
Leaders is the term used to describe firms who are implementing AI across eight or more business functions - for instance, for tasks such as marketing and business development.
On the other hand, strivers are companies who say they are using AI on a smaller scale, across an average of four task areas.
EXL found that in many cases, the implementation of artificial intelligence amongst strivers was “deeper and more focused”, meaning greater results were achieved in certain areas such as lowering costs.
On the other hand, when looking at the broader picture, firms designated as leaders were more likely than strivers to hit nearly all of their goals.
Over 90% of leaders claimed they were successfully using AI to improve the quality of their decision-making, as well as to enhance existing products and services, to reduce risk, and to increase revenue.
“Strivers are also on a positive trajectory,” said EXL, “with upwards of 70% to 80% indicating they’ve achieved many of their desired outcomes.”
Where goals weren’t achieved, EXL highlighted weak points such as a lack of resources, budget concerns, outdated systems, and the difficulty of explaining AI to employees.
Fears around generative AI
Generative AI is a type of artificial intelligence that is capable of creating content like text, images, or audio in response to prompts entered by a user.
In EXL's UK report, nearly three-quarters of financial leaders surveyed said that they were already using this technology, higher than the 50% figure recorded amongst US counterparts.
ADVERTISEMENTThat said, this doesn’t mean there aren’t still concerns about recent breakthroughs.
Some 70% of UK senior executives in insurance and banking claim their organisation is deeply concerned about the use of generative AI, citing fears such as risk to brand reputation and the possibility of inaccurate data impacting outcomes.
Some such threats were discussed in November of last year when political and tech leaders gathered in the UK for the world's first global AI safety summit.
The event highlighted major risks associated with artificial intelligence, notably, personal data leaks, the spread of disinformation, and the possibility of AI developing biological or chemical weapons.
As generative software is becoming more widespread, EXL reported that companies are looking for ways to mitigate these dangers moving forward.
ADVERTISEMENT"If the current barriers can be overcome, we’re likely to see far greater use of AI, and in more areas of the business, in companies in the very near future," the report concluded.
