Emerging disruptive technologies, including artificial intelligence (AI), have continued to rise on the agenda for C-suite executives in the UK in the financial services industry over the last two years; according to a new study from Accenture, the IT services and consulting firm.
Accenture revealed that UK FS executives are more concerned about the risks posed by implementing AI and other disruptive techs than their global peers.
In its latest global Risk Study of the top concerns among senior executives at financial services businesses, the firm found that 31 per cent of financial services chiefs in the UK said that implementing disruptive tech, including AI, had become a more significant concern in the last two years, compared to just 25 per cent globally.
Of all the risk factors that have increased in the last two years, disruptive technologies were the second most significant for UK executives, only behind regulatory and compliance risks (33 per cent). Disruptive technology risk ranked fourth among global executives.
Around 35 per cent of UK executives said that implementing disruptive tech has escalated the importance of financial risks (market, credit, liquidity risks), compared to a global average of 29 per cent. Among the global sample, operational risk factors (cyberattacks, supply chain disruption) were seen to be more significantly impacted by implementing disruptive technologies (39 per cent).
In contrast, climate change and environmental risks were ranked towards the bottom of the factors that had risen up the agenda in terms of their potential impact on FS firms. Just 17 per cent of executives said climate risks had become significantly more important, compared to a global average of 24 per cent.
UK respondents said that climate risks had most impacted their concerns around broader financial risks (56 per cent), compared to just 24 per cent globally. They were also more concerned that climate risk would most escalate the importance of operational risks (34 per cent).
Embracing the potential of AI
While AI climbed the priority list, climate change and environmental risks were ranked towards the bottom of the factors that had risen up the agenda in terms of their potential impact on financial services firms.
For global executives, climate change and environmental risks was the fifth most prominent risk category to have risen up the agenda in the last two years. Twenty-four per cent of global executives said the category was the most prominent for them in that time from.
Heather Adams, managing director and head of risk strategy and consulting at Accenture, commented: “Implementing artificial intelligence has shot up the agenda for businesses across all sectors in the last two years, as business growth and efficiency benefits are becoming clearer.
“Amid the hype, it’s little surprise to see that UK financial services firms are increasingly concerned about the risks its implementation could pose to their businesses.
“New innovative technologies inherently bring some uncertainty, and with uncertainty comes risk in the short term. But the potential is even greater, and so to mitigate these risks, UK financial services businesses must implement robust governance frameworks and ensure thorough data quality control, something they are uniquely well-placed to do due to heavy regulation and governance requirements in the sector.
“If embraced in a safe and responsible way, AI and other disruptive technology will help mitigate some of the other risks, such as operational threats and talent productivity.”