AI promises huge productivity gains for financial services

In an article by Donna FuscaldoArtificial intelligence) will bring lots of gains to the financial services industry, whether it’s through automating processes or adding more convenience for their customers.
But now we can quantify just how big of an enhancement AI will have on the bottom line for financial services companies around the globe. According to consulting firm Accenture it’s $140 billion. That’s in productivity gains and cost savings by 2025, all because of artificial intelligence and augmented technology.

Accenture recently studied the changing face of the workforce as disruptive technologies become more prevalent in companies around the world. The consulting firm found around 50% of tasks in the financial services industry could be augmented with technology by 2025, which will result in a big increase in productivity – for example:

  • AI could aid financial advisors in making real-time stock picks
  • Or help loan underwriters better gauge the risk of borrowers
  • Or it could enable banks to offer customised products based on an individual’s personal finance habits

 

Banks are expected to generate $59 billion in productivity gains by augmenting skills with technology while insurance companies can expect to generate $37 billion in gains and capital markets companies are forecast to realize $21 billion in productivity increases.

While financial services companies have already seen big boosts in productivity and efficiency thanks to automating data entry, processing, and account reconciliation there’s room to do more. Accenture said anywhere from 7% to 10% of tasks within banks, insurers, and capital market firms could be automated savings banks $12 billion, insurers $7 billion and investment firms $4 billion.
With all this augmenting and automating going on it also means the face of financial services firms’ workforce has to change. As it stands there’s a dearth of workers skilled in these advanced technologies making it hard to find talent. As more companies embrace AI, data analytics and machine learning, it’s only going to get tougher to find top talent.
At the same time, many companies lack a clear plan to prepare their workforce for roles in which technology and humans work side by side. Without those transformations, companies will never achieve the billions of dollars in productivity gains that Accenture says is available to them.

“There’s a new era ahead for financial firms that see the value of combining human ingenuity and personal touch with technology efficiency and precision to create new sources of growth,” said Cathinka Wahlstrom, who leads Accenture’s Financial Services practice in North America when announcing the research results. “This isn’t about cutting costs to improve the bottom line, it’s about embracing technology to transform the workforce.”

The scarcity of workers who possess data analytics, cybersecurity, and AI skills can’t be met by recruiting more people. It has to be solved by reskilling existing employees so they can deliver value to the enterprise almost immediately, argues Accenture. By automating some job functions the employee can be redirected to focus on high-value work whether that’s building customer relationships or coming up with new products or services. It’s not that computers will replace workers, it’s that computers will work alongside them.

“Traditionally companies have said OK we will recruit more people but what we’re saying in this report is you can’t just go get more people. There aren’t enough people with the skills,” said Bridie Fanning, Accenture’s talent & organisation practice lead for financial services.  “They are much better off if they reskill their people and get them the training they need.”

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