Generative artificial intelligence (AI) is gaining ground in the financial services sector, with nearly three-quarters of financial firms actively piloting this transformative technology, a study has revealed.
Research conducted by UK Finance and global management consultancy Oliver Wyman found that 70 per cent of surveyed financial services firms are already in the pilot stage of testing generative AI’s capabilities.
The survey of 23 companies ranging from international to mid-size banks and non-banking FS firms also revealed that 95 per cent are already accounting for AI risks in their control frameworks, and three out of five (60 per cent) have even taken action to prepare for the risks of generative AI.
Four out of five FS firms (80 per cent) say collaboration with regulators is beneficial to highlight best practices in AI and create an internationally aligned regulatory system.
“Generative AI is a new horizon for financial services, with clear opportunities for firms, from boosting productivity and growth, to improving the experience for customers,” commented Jana Mackintosh, managing director of payments, innovation and resilience at UK Finance.
“And as this report shows, a majority are already piloting the technology to find the best way to safely explore these exciting opportunities. What firms want now is to collaborate with policy makers and regulators on a long-term, flexible approach to regulation that can keep pace with technological change, ensuring our FS sector can guard against any risks from this technology, while safely seizing its great competitive advantages.”
Three-quarters of firms believe generative AI will benefit them to at least the same level as predictive AI, with the main expected benefits in process automation, sales and customer service functions. Survey respondents said the top three expected benefits in these areas are better productivity (74 per cent), operational effectiveness (70 per cent) and better customer experience (61 per cent).
Firms are also clear, however, about the risks posed by this new technology, and three out of five say they are already adapting their existing risk management frameworks to include generative AI.
Sian Townson, partner, Oliver Wyman, also commented: “With the financial services sector in the throes of technological change, AI has the power to turbocharge opportunities, if used correctly. Adoption should be balanced with nascent regulation, both within the UK and internationally.”