AI in banks: More people, not less
- Posted on November 14, 2023
- Estimated reading time 3 minutes
We’ve just completed a global survey on AI readiness among 3,000 senior executives from a variety of industries with annual revenue over $500 million. This is what we found from talking to banks:
- Almost two-thirds (62%) expect AI to increase the number of human roles required for their bank to operate by the end of 2024
- Almost a quarter of bankers (24%) think AI will help them take more intelligent actions with assistance from generative AI tools such as Microsoft 365 Copilot; 6 in 10 (59%) bank staff claim to use AI every day
- However, over half of the banks interviewed (53%) believe they will need significant support to train staff to use generative AI tools like Microsoft 365 Copilot
- Over half (51%) think leaders understand generative AI and its governance needs today
- Over half (54%) of bankers see process automation, improved efficiency and reduced error from manual, repetitive activities as the key benefits of applying AI to their business
- Banking CXOs see customer onboarding automation as the most exciting AI use case (42%), followed by fraud detection (41%) and automation of risk, regulation and compliance requests (41%)
- The top 2024 investment priorities to scale up AI are based around technology, including automation, data and analytics platforms (57-62%)
What I want to focus on in this blog is the role that people will play in the future of AI.
Contrary to stereotypes, AI will not necessarily eliminate jobs in banks. One European banker we interviewed said this: “AI will lead to task – not job – displacement. The challenge is for each knowledge worker to be told enough about AI so they can themselves displace the tasks that they don't want to do.” Banks see AI delivering automation and process efficiency, as well as the reduction of repetitive tasks, but new roles will be created as a result of this – and new skills will be needed.
Almost two-thirds (62%) think that AI will increase the number of roles in a bank over the next year. Forty percent think the increase will be around 1-9%; one-fifth (22%) estimated 10-19%. The challenge will be to find the right people. Acquiring the right talent will become a major issue for banks as they compete with other sectors, such as technology: ‘Should I join JP Morgan or should I join Apple?’ Banks will need to make their employee value proposition more compelling to attract and retain AI specialists and data scientists.
There will be new generative AI tools that will augment the day-to-day activities of bank staff. I was talking to a senior Microsoft AI executive recently about this. They compared generative AI to having an executive assistant, a business analyst and a copy writer all now working just for you. Microsoft have developed a copilot service for each part of their portfolio (PowerPoint, Word, Teams, Outlook etc.) to deliver that experience. Almost a quarter of our respondents (24%) thought this type of copilot service would help bank staff make more intelligent decisions. However, over half (53%) agreed that significant training and development would be needed to get bank staff up to speed with such new tools. This will involve a serious cultural shift in the way we work.
One final point about leadership. There is an assumption that board members are knowledgeable about AI. Over half (51%) thought leaders understand generative AI and its governance needs today. However, one US banker observed: “The operating committee and the board level are not folks who traditionally understand technology. Leadership has excitement about the potential of AI, but don't necessarily understand what it means to be AI-ready. Many are still struggling with their journey to cloud. Many haven't even completely transitioned to cloud yet, let alone using tech that is cloud-native. (We’re) using applications which still need to be modernized to be cloud-ready, let alone have them feed off generative AI capability.”
AI readiness has many angles. Next time, we will look at data within banks and how AI-ready it is for use by new generative AI tools.
Go to our banking research to find out more details.