Despite economic constraints, financial institutions globally continue to invest in artificial intelligence, Banking as a Service (BaaS) and embedded finance. Decision-makers in financial institutions worldwide are excited about the opportunities presented by fast technological and cultural change within the industry. 87% of people are personally excited about the pace of change. 83% are excited about the opportunities it will bring for their financial institution.
That is according to Finastra’s annual global survey, Financial Services: State of the Nation Survey 2023. The survey found that financial institutions are rapidly exploring the benefits of AI. Deployment of AI and improvements in AI capabilities is increasing notably year-on-year. Globally, 37% of respondents stated that their financial institution had improved or deployed AI technology in the last 12 months. This rises from 30% in 2022. The growing importance of generative AI also stands out. 83% of decision-makers say their institution is interested in the technology, 26% having already incorporated generative AI in some form. Only 6% of respondents globally say that their financial institution is not interested in adopting the technology.
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Generative AI to meet customer expectations for financial institutions
Respondents perceive generative AI as a key means to meet increased customer expectations for personalised services. 32% of those interested in the technology saying they will use it in this way. When asked about specific business areas, the most common use case for generative AI is collecting, processing, and analysing data for ESG criteria classifications and decision-making. Other widely cited use cases include: automating manual or repetitive tasks; collecting, processing, and analysing data for KYC or AML purposes; and improving risk management and decision-making processes.
The survey also shows an increased uptake of BaaS. 48% of financial institutions surveyed have either deployed BaaS or improved their capabilities in this area in the last year. This is a sizeable increase from the 35% recorded in 2022. Other insights highlighted by the report are the optimism about the outlook for tech investment despite current constraints and an agreement that Open Finance is making financial services more collaborative.
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