Banking and Financial Markets CEOs are betting on generative AI to stay competitive, yet workforce and culture challenges persist By Investing.com
- Two-thirds (66%) of banking and financial markets CEOs surveyed said that the potential productivity gains from AI and automation are so great that they must accept risks to remain competitive.
- 65% of financial leaders say success with AI will depend more on people adopting it than on the technology itself, and 60% realize they are pushing for AI adoption more quickly than some might find comfortable.
- Half (50%) of financial services CEOs surveyed say they are hiring for AI-related production roles that did not exist last year, and 53% indicate they are struggling to fill key technology positions.
These findings are part of a comprehensive annual global industry study that surveyed more than 3,000 executives from more than 30 countries and 26 industries, which included 297 BFM CEOs representing retail, corporate, commercial and investment banks and financial markets.
The survey found that productive AI is seen as the key to unlocking competitiveness. 57% of BFM CEOs surveyed said that gaining a competitive advantage in the sector will depend on who has the most advanced AI.
The findings also revealed that CEOs are dealing with complex issues around culture in the age of artificial intelligence. 59% of CEOs surveyed by BFM said that cultural change within a company is more important than overcoming technical challenges when becoming a data-driven business, with 65% also believing that success with AI will depend more on people adopting it than the technology itself.
Despite this, 60% of CEOs surveyed by BFM say they are pushing for AI adoption more quickly than some employees might find comfortable. However, 43% admitted that their employees do not fully understand how strategic decisions affect them.
Skills have also proven to be an area of focus for CEOs. While 60% of CEOs surveyed say their teams have the skills and knowledge to integrate generative AI, more than half (53%) of respondents say they are already struggling to fill key technology roles. Additionally, 50% of these CEOs said they are hiring for roles that did not exist this time last year due to generative AI, demonstrating the rapid transformation taking place in the workforce.
“Our research reflects the enormous pressure CEOs are under to remain competitive,” he said. “Along with profitability and productivity, getting the right skills remains an ongoing challenge, with CEOs now hiring for jobs that did not exist until recently.”
Additionally, 66% of CEOs surveyed by BFM said that the potential productivity gains from automation are so great that they would accept significant risks to maintain their competitive edge, with 67% saying they would risk more than their competitors to maintain a competitive advantage.
However, BFM CEOs recognized that trust could not be sacrificed for the sake of innovation. 64% of CEOs surveyed agreed that maintaining customer trust would have a greater impact on success than any specific product or service, and 83% acknowledged that transparency around adoption of new technologies was critical to enhancing trust between customers and employees.
“Banking and financial markets CEOs are keenly aware of the competitive benefits that generative AI will bring and are eager to move quickly,” said John Dugenin, distinguished engineer and managing director of the global financial services industry at the company. IBM. “In their eagerness to embrace the benefits of this powerful new technology, it is critical that financial services leaders ensure their organizations are taking steps to design trustworthy AI designed to reduce risk and earn the trust of their customers, employees and regulators.”
Main study findings
BFM CEOs are hedging their bets on generative AI to stay competitive and are willing to take risks to make it happen.
- 57% of respondents believe that competitive advantage will depend on who has the most advanced AI.
- Two-thirds of survey respondents (66%) agreed that the potential productivity gains from automation are so great that they would accept significant risks to maintain their competitive edge, and 67% said they would take greater risks than their competitors to maintain a competitive advantage.
- However, customer trust was not a sacrifice CEOs were willing to make. 64% of survey respondents agreed that maintaining customer trust will have a greater impact on success than any specific product, and 83% acknowledged that transparency in the adoption of new technologies is critical to enhancing trust between customers and employees.
The workforce is transforming rapidly.
- 50% of CEOs surveyed said they are hiring for roles that did not exist last year due to the emergence of generative AI.
- However, more than half of respondents (53%) say they actually struggle to fill key technology roles.
- 60% of respondents said their current team has the knowledge and skills to integrate new technologies such as artificial intelligence.
- Only 40% of respondents evaluated the potential impact of generative AI on their workforce.
- CEOs surveyed say 34% of their workforce will need to retrain and reskill over the next three years, compared to just 7% in 2021.
Financial institution leaders recognize that it takes a cultural shift to successfully scale AI, but they face collaboration and adoption challenges within their organizations.
- 64% of CEOs surveyed say the success of their organizations is directly linked to the quality of collaboration between finance and technology, but half (50%) say competition among their CEOs sometimes gets in the way of collaboration.
- 59% of respondents agree that cultural change is more important in becoming a data-driven business than overcoming technical challenges.
- 65% of BFM CEOs say success with AI will depend more on people adopting it than the technology itself.
- Meanwhile, 43% admitted that their employees do not fully understand how strategic decisions affect them.
- 60% of CEOs surveyed say they are pushing for AI adoption more quickly than some might find comfortable.
- 64% of CEOs surveyed say that winning the future requires rewriting their organizational rules of the game.
- 72% plan to maintain or accelerate the pace of transformational change in their organizations
- 2024.
Productivity is a top priority but focusing on short-term goals can hinder long-term progress.
- BFM CEOs have ranked technology modernization as their top priority over the next three years.
- Productivity, profitability and scalability were identified as the biggest challenges facing BFM CEOs over the next three years, with 46% agreeing that generative AI would be one of the most useful tools in helping them overcome these challenges.
- However, BFM CEOs identified a focus on short-term performance as the biggest barrier to innovation.
IBM is a leading provider of enterprise AI, hybrid cloud, security, and ESG insights to the global financial services industry. Its deep industry expertise, broad range of services and solutions, and strong ecosystem of fintech partners enable collaboration, innovation and creativity with clients. As a trusted partner for banks, insurance companies, capital markets and payment providers, IBM He guides financial institutions through all stages of their digital transformation journeys IBM Consulting It delivers the proven infrastructure, software and services they need through IBM technology. For more information visit www.ibm.com/industries/banking-financial-markets
methodology
IBM Institute for Business ValueIn collaboration with Oxford Economics, it interviewed 3,000 executives from more than 30 countries and 26 industries.
IBM Institute for Business Value, IBM The Center for Thought Leadership Research brings together
Global research and performance data combined with expertise from leading industry thinkers and academics to deliver insights that make business leaders smarter. For more world-class thought leadership, visit www.ibm.com/ought-leadership/institute-business-value
on IBM
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