Banking And Financial Market CEOs Betting On Gen AI, But Challenges Persist: IBM Study

Banking and financial markets chief executives are facing workforce and culture challenges as they act quickly to implement and scale generative artificial intelligence across their organisations, a survey of 3,000 CEOs by IBM Institute for Business Value shows.

The survey found that generative AI is perceived as the key to unlocking competitiveness, with 57% of BFM CEOs saying that gaining a competitive advantage in the sector will depend on who has the most advanced generative AI.

According to findings, 59% of surveyed BFM CEOs said cultural change is more important than overcoming technical challenges when becoming a data-driven business, with 65% also believing success with AI will depend more on people’s adoption than the technology itself. Despite this, 60% BFM CEOs said they are pushing for AI adoption more quickly than some employees might find comfortable.

Skills are also an area of focus for the CEOs. While 60% BFM CEOs said their teams have the skills and knowledge to incorporate generative AI, 53% admitted they are already struggling to fill key technology roles. Also, 50% of these CEOs said they are hiring for roles that did not even exist this time last year due to generative AI, indicating the rapid workforce shift.

“Our research reflects the tremendous pressure CEOs are under to keep their competitive edge. Workforce needs are shifting rapidly in the financial services sector and CEOs must ensure that upskilling programmes are prioritised as an important element of any financial institution’s enterprise strategy for scaling generative AI,” said Shanker Ramamurthy, global managing partner, banking and financial markets, IBM Consulting.

Additionally, 66% of BFM CEOs said the potential productivity gains from automation are so great that they’d accept risks to stay competitive, with 67% saying they would risk more than their competitor to maintain competitive edge.

However, 64% agreed that maintaining customer trust will have a greater impact on success than any specific product or service, and 83% acknowledged that transparency around adopting new technologies was critical for fostering trust among customers and employees.

Only 40% of respondents have assessed the potential impact of generative AI on their workforce. Surveyed CEOs also said 34% of their workforce will require retraining and reskilling over the next three years, up from 7% in 2021.

Financial institution leaders recognise it takes a cultural shift to scale AI successfully but face collaboration and adoption challenges within their organisations. Of the CEOs surveyed, 64% said their organisation’s success is directly tied to the quality of collaboration between finance and technology, yet 50% admitted competition among their C-suite executives sometimes impedes collaboration.

BFM CEOs ranked tech modernisation as their highest priority for the next three years. Additionally, productivity, profitability and scalability were identified as the biggest challenges facing these CEOs, with 46% agreeing that generative AI will be useful in helping them overcome these challenges. However, BFM CEOs identified the focus on short-term performance as their top barrier to innovation.