As artificial intelligence (AI) spreads across every nook and cranny of the UK fintech sphere, we find out how small and medium businesses (SMEs) are integrating the technology and if their attitudes have changed towards it.
Two separate studies have recently been published by iwoca, the small business lender, and Moody’s Analytics KYC, the compliance regtech, focusing on the adoption of AI by UK SMEs.
More than 55 per cent of SME owners feel they have a good understanding of AI according to iwoca’s study. Furthermore, 27 per cent are already using AI products like ChatGPT. Three times as many feel AI is a positive development for their company too. This is further supported by Moody’s Analytics’ study which further suggests there is an overwhelming desire for AI adoption. In fact, 83 per cent expect it in the next five years in the risk and compliance sector.
Nine out of 10 early AI adopters have reported AI as having a positive impact, with a further 70 per cent believing it will massively transform their work. Speaking on the findings, Keith Berry, general manager know your customer solutions at Moody’s Analytics said: “The benefits of AI are currently viewed in easy-to-measure quantitative terms.
“Process efficiencies are a good start to AI adoption, but they are only scratching the surface of the technology’s capabilities. Advanced data analytics, accurate predictions, and the scalability of data are all features compliance teams will not want to miss out on.
“With many of the professionals we spoke to expecting the widespread adoption of AI in the next one to five years, steps need to be taken for it to meet its transformative potential across risk management and compliance.”
Not a unanimous attitude
Despite many being optimistic about AI, there are some concerns. iwoca highlights that 51 per cent of business leaders are concerned about using AI, with almost three in 10 (28 per cent) believing it could ruin their business model.
The data reveals many reasons why UK SMEs are apprehensive about adopting AI. Two in five say it is not relevant to their business (41 per cent). Two in 10 think they lack the technical expertise to implement it (18 per cent), that the cost of implementation is too high (17 per cent), and are concerned about algorithmic bias (17 per cent).
Mark Di-Toro, director at iwoca, said: “The research suggests that although SME owners have been keeping up with AI developments, many are naturally apprehensive and remain unsure of how to leverage it. Defining AI’s applications for your business and identifying specific areas for its use are key to demystifying it. The overarching concept of AI can seem daunting. However – if used properly – we’ve seen that the technology can drive practical benefits, saving time and money.”
AI in investment
A third separate study has been conducted by Avaloq, the software provider, to investigate AI’s usage in investment. More investors are looking for reliable advice before making an investment. As a result, 69 per cent of the respondents stated they would accept AI support/advice.
More than half of UK investors (54 per cent) would support a blended approach when it comes to advice. This is compared to just 15 per cent who are comfortable with the process being fully driven by AI.
Avaloq also surveyed a further 2,500 investors from five additional markets in Europe and Asia and found that they are more receptive to the use of AI than those in the UK. The global average for those willing to use AI for some or all of their approach to financial tasks (74 per cent) was higher than the corresponding score for the UK (69 per cent).
UK investors are also less likely to cede control to AI; across the different use cases, 22 per cent of global investors would accept an approach fully driven by AI, compared to 18 per cent in the UK.
Gery Zollinger, head of data science at Avaloq, said: “Our research reveals that investors are more open to using AI in the investment process but still want the human touch, indicating natural opportunities for wealth managers to integrate AI into their offerings in a way that augments the service they provide.”
“Scepticism over full delegation to AI and the issues that will be highlighted at this week’s AI Safety Summit offer pause for concern and highlight the importance of the financial sector fully understanding the risks associated with AI – as well as the need for effective regulation to ensure that AI does not compromise investor safety.”