The financial sector is leading the UK in the use of artificial intelligence (AI), according to new research from Microsoft, which found nearly three-quarters (72%) of banks, insurance firms and other financial institutions are using such technologies.
This represents a 7% increase over the last 12 months, and is 56% higher than the national average.
The report also shows that businesses that are using AI at scale are performing an average of 11.5% better than those who aren’t, which has increased from 5% last year.
Chris Skinner, a financial author and blogger, said: “It is very early days for AI in the UK financial services industry, although UK banks are pretty much on the same level as the rest of Europe’s financial firms, if not slightly ahead.
“The banks in America and China are doing some really impressive stuff; for example, using an AI engine to analyse contracts and do in one second what previously took 360,000 hours of legal time.
“The biggest issue most institutions face is the fact they have 50 years of infrastructure that they need to now turn into a rationalised structure for intelligent customer servicing and marketing.”
AI – The Fourth Industrial Revolution
According to market figures from IDC, a market intelligence firm, investment in AI will reach $5.6bn this year (£4.55bn), and estimates from Business Insider suggest that AI tech could save banks around $447bn in costs by 2023. $416bn of this will come from the automation of front and middle accounting.
Half of financial leaders told Microsoft that they aim to make their organisation a leader in AI innovation, with a further 46% believing that the industry has the necessary structures in place to use AI to gain a competitive edge on the world stage. This is higher than the national average, showing the financial services industry is more aware and optimistic of the benefits that AI will bring.
Cindy Rose, CEO of Microsoft UK, said: “Artificial Intelligence is the engine of the Fourth industrial revolution and is at the heart of the digital transformation currently reshaping business, government and society. Little surprise, then, that the global AI market is expected to be worth up to $15.7 trillion by 2030.
“For any organisation looking to get ahead in this AI-led future, the need to accelerate the adoption of new technology across their entire organisation is pressing.”
Predictive analytics and AI systems that interpret data and help users learn more about their company are the most used AI-driven technologies that have so far been adopted by the financial services data, with 52% of businesses included in the study saying they use these technologies.
These are followed by Robotic Process Automation (44%), Automation of file generation and computer aided manufacturing (43%) and Machine Learning (40%). Automation saw the biggest year-on-year rise of 16%.
Security must be a priority
As with any introduction of new technology, AI must be secure and safe for clients and customers, a point acknowledged by Roshan Rohatgi, Senior Innovations and Entrepreneurship Professional at NatWest, who said: “AI that touches customers is – and will always be – subject to a very high level of scrutiny and governance.
“Before any kind of technical development or deployment it is important to establish how and why the AI solution will benefit the customer and what the risks are. Continuous human involvement is a prerequisite, with business and specialist teams supporting efforts to implement and manage the technology ongoing.
“The most important thing is that the whole process is done in a safe, secure and repeatable fashion. Having a framework that supports and guides the development, procurement and deployment of AI is desirable.”
Not all firms are in the same position as NatWest, however, with the report finding that 60% of employees in the financial industry are yet to receive training to use AI in their job, while 93% said they have not received consultation from their boss about its introduction within their organisation.
With the industry at a tipping point – operationally, financially and reputationally – AI offers the opportunity for positive transformation and to improve how organisations work, but for firms to fully benefit from it, they must act now and implement it across their business. This does require re-skilling staff, creating principles for open and responsible use of AI, and increasing the understanding of how the technology actually works.