A new survey from KPMG finds that 75 percent of financial services (FS) business leaders polled believe artificial intelligence (AI) is more hype than reality, and that number has increased by 33 percentage points compared to last year’s report.
“The interest and focus on AI continues to accelerate,” said KPMG Advisory principal Agnel Kagoo. He believes good progress is being made in the sector on the adoption and implementation of AI, as organizations transition from experimentation to operationalization of solutions.
Kagoo said organizations that approach AI from just a defensive strategy—to use AI and machine learning to drive cost savings, or to drive operational efficiency -- are not yet realizing the returns.
“They've achieved some benefits but not radiating to the leadership level relevance as the focus has been siloed rather than end-to-end processes. But for the organizations that focused on the offensive strategy i.e. growth agenda with a focus on the customer, it is beginning to pay off.”
Kagoo said consumers are beginning to expect a digital experience in every interaction, irrespective of the services. The leaders in this space will be able to serve their clients with hyper-personalization and predictive models to meet the client where they are in their lifecycle and financial needs.
While 55 percent of FS business leaders said they believe AI adoption is moving at the right speed, 37 percent said it is moving faster than it should. In addition, 85 percent of those surveyed said they wish their business would adopt AI technology more aggressively.
Cyber security breaches (50 percent) and privacy violations (44 percent) were noted as the top greatest potential risks financial services business leaders face with implementing AI. But most FS business leaders surveyed (93 percent) are confident in AI’s ability to detect fraud, an increase of 8 percentage points compared to last year’s report.
Eighty-one percent of the FS business leaders said employees in their organization are prepared for AI adoption in terms of skill sets.
Despite feeling like things are moving too fast, 71 percent of FS business leaders say they think the U.S. is behind in terms of AI adoption.
The AI survey, which polled 950 executives across seven industries, included 150 business leaders representing financial services, with 69 percent representing banking (investment, commercial, or consumer/small business), 14 percent representing asset management, 12 percent from insurance, and 5 percent other.
To speak with Agnel Kagoo and to learn more about the survey, please contact Melanie Batley.
The KPMG study, Thriving in an AI World, is an evolution of a study KPMG originally released in early 2020. The findings are based on feedback from a range of 950 full-time business decision makers and/or IT decision makers* with at least a moderate amount of AI knowledge and at companies with over $1 billion in revenue**, across seven industries (150 respondents+ per industry): technology, financial services, industrial manufacturing, healthcare, life sciences, retail, and government. The online survey was fielded between January 3rd, 2021 and January 16th, 2021. The margin of error (MOE) for the total sample at the 95 percent confidence level is +/- 3.2 percentage points.
*Only government respondents included IT decision makers.
**Healthcare and life sciences respondents were from companies with over $100 million in revenue. +Healthcare and life sciences respondents only had 100 respondents per industry.