Most insurance as well as banking companies happen to be incorporating artificial intelligence- AI into their workflow; however, there are obstacles that remain, says a new report.
It is worth noting that the UK’s financial leaders happen to be coming under real pressure in order to rapidly execute artificial intelligence in their businesses.
This is as per the new report, released on January 29, by digital consulting as well as analytics company EXL, on the basis of the surveys from 64 senior figures across the UK’s insurance and banking sectors.
Among the respondents, 86% said that their firms had gone on to invest over £7.9 million or €9.25 million when it came to AI across the past fiscal year, with almost 35% reporting investment of over £39 million or €45.7 million.
And yet, although the companies scramble to keep themselves ahead of the curve, EXL has gone on to show that they sometimes do compromise when it comes to the quality of transformations, and that too in the name of speed.
Practice head of EMEA analytics, who also happens to be the global chief strategy officer, EXL, Kshitij Jain, said that their findings go on to demonstrate that the sector leaders do recognize the transformative potential when it comes to AI for their respective businesses.
He added that the risk is that this mounting pressure can go on to lead to investment that is not properly thought through. A requirement so as to move quickly can mean making sure operations that happen to be truly data-driven get de-prioritized, and this can indeed be a costly mistake.
When a company goes on to deploy a data-driven approach, it means it goes on to make strategic decisions that are based on data analysis as well as interpretation. Of the firms surveyed, around half—47%, to be precise—went on to confirm that their organization happens to be minimally data-driven, which means that if AI gets incorporated into tasks, it is most likely going to be less effective.
Focused initiatives go on to reap rewards
EXL went on to come up with two separate groupings so as to study the rollout of AI, which they named leaders and strivers.
Leaders happens to be the term that is used to describe firms that happen to be implementing AI throughout eight or more business functions – for example, for tasks concerning marketing and business development.
On the other hand, strivers happen to be those companies that say they are making use of AI on a smaller scale, across an average of four task areas.
It is well to be noted that EXL found that in many cases, the execution of AI amongst strivers happened to be deeper and more focused, thereby meaning greater results, which were achieved in specific areas like lowering costs.
However, when looking at the broader picture, firms termed leaders happened to be more likely than strivers to touch nearly all of their objectives.
More than 90% of leaders went on to claim that they were successfully making use of AI so as to improve the quality of decision-making, enhance existing products as well as services, decrease risk, and also surge revenues.
Strivers, apparently, happen to be on a positive trajectory, said EXL, with almost 70% to 80% indicating that they have achieved many of their anticipated outcomes.
In parts where objectives were not achieved, EXL went on to highlight weak points like a lack of resources, issues pertaining to budget, outdated systems, as well as the difficulty of explaining AI to employees.
Fears that surround generative AI
Generative AI happens to be a type of artificial intelligence that has the capacity to create content such as text, images, or audio in response to the prompts that are entered by a user.
In the UK report by EXL, almost three-quarters of financial leaders who were surveyed said that they were already making use of this technology, more than the 50% figure recorded in their US counterparts.
But this does not mean there are still no concerns about recent breakthroughs.
Around 70% of UK senior executives from insurance and banking go on to claim their organization is deeply worried about the usage of generative AI, thereby expressing fears like risk to brand reputation as well as the possibility of inaccurate data affecting outcomes.
Some of these threats were discussed in November 2023, when political as well as tech leaders had come together in the UK for the first global AI safety summit in the world.
The event went on to highlight major risks that are associated with artificial intelligence, especially personal data leaks and the spread of disinformation, as well as the possibility of AI developing biological or even chemical weapons.
As generative software happens to be becoming more widespread, EXL has put forth in its report that companies are finding ways to root out these dangers going forward.
The report went on to conclude that if the present barriers can be thwarted, they are likely to see far bigger use of AI, and that too in more areas of the business.