Last Updated on: 23rd March 2024, 10:42 am
Fifty One Degrees has unveiled findings from a new study indicating that a significant 84.6% of tasks within the financial sector, including banks, insurance entities, and FinTechs, stand to gain from AI technology. This adoption could lead to an impressive increase in economic output by £41.7bn for the sector.
- 8 in 10 tasks will be made more efficient by deploying AI, whereas just over half of tasks will be higher quality where AI is used.
- GenerativeAI (GenAI) is the most powerful AI technology for financial services, and GenAI Assistants would benefit 74.9% of tasks.
- The greatest efficiency gains will be for internally focused tasks and processes, as opposed to customer-facing tasks, with an efficiency gain of 41% for internal tasks, and 34% for customer-facing.
- GenAI is expected to increase economic output in financial services by up to 15%, resulting in an additional £41.7bn of additional output from the sector.
From the AI Consultancy’s Desk:
On 19 March 2024, AI consultant firm Fifty One Degrees shared a groundbreaking research study, demonstrating nearly 85% of financial services tasks could be optimised with generative AI technology.
This comprehensive analysis covered 311 tasks across fourteen functional areas in the financial sector, assessing the potential benefits and enhancements AI could bring to each.
GenAI: A Game-Changer for Financial Services
The findings underscore GenAI Assistants as particularly transformative, applicable to three-quarters of tasks within financial and insurance firms. These assistants, tailored to specific organisational procedures and regulations, show significant promise in areas processing vast amounts of natural language data like Compliance and Underwriting, potentially automating or streamlining workflows.
Moreover, other AI tools, including training and legal applications powered by Generative AI and Large Language Models, are identified as beneficial for 39% of activities.
Functional Impacts and Economic Significance
Teams focused on Analytics, Technology, Customer Services, and Underwriting are among those that could significantly boost efficiency and work quality through GenAI. While areas such as Compliance and Legal may see efficiency spikes, quality improvements might be more moderate.
The broader economic implications suggest that Generative AI could inject up to £41.7bn into the UK’s financial services, considering the sector’s substantial contribution to the national economy and employment.
Insights from Fifty One Degrees’ Leadership
Recent research estimates that Generative AI will drive $2.6 trillion to $4.4 trillion annually in value for global companies. Within Financial Services and Insurance, that figure is $200 billion to $340 billion, which is equivalent to 9 to 15 per cent of operating profits. The UK financial services and insurance industries produce £278bn of economic output. A 15% boost would generate a staggering £41.7bn of additional economic output. Further, the UK financial services industry equates to 8.3% of the entire UK economy and 2.5 million people are employed in the sector. Therefore, any gains made by financial institutions would have far-reaching impacts across the wider UK economy.
Commenting on the study, co-founder and CEO of Fifty One Degrees, Nick Harding said “The UK financial services industry is a powerhouse that fuels the local economy by servicing consumers and businesses, but is also the UK’s biggest export. Enabling this industry, which is so critical to our collective success, to remain at the forefront of technology is something we’re passionate about. Assertively adopting generative AI will enable UK financial services to grow further, enabling this vital sector to remain a global leader.
And this is just the beginning. This study represents the generative AI technology and tools that are available today. What we’ve experienced is rapid development and evolution of the technology and its capabilities, meaning the opportunity for businesses to benefit will only increase.”
