Generative AI is perceived as the key to unlocking competitiveness, finds a study from the IBM Instutite for Business Value. 57% of BFM CEOs surveyed stated that gaining a competitive advantage in the sector will depend on who has the most advanced generative AI.
The findings are part of an annual global cross-industry study that surveyed more than 3,000 CEOs from over 30 countries and 26 industries, which included 297 BFM CEOs representing retail, corporate, commercial and investment banks and financial markets.
“Our research reflects the tremendous pressure CEOs are under to keep their competitive edge. Alongside profitability and productivity, getting the right skills remains a persistent challenge, with CEOs now hiring for roles that did not exist until recently,” said Shanker Ramamurthy, Global Managing Partner Banking & Financial Markets, IBM Consulting.
“Workforce needs are shifting rapidly in the financial services sector and CEOs must ensure that upskilling programs are prioritized as an important element of any financial institution’s enterprise strategy for scaling generative AI.”
66% of BFM CEOs surveyed stated that the potential productivity gains from automation are so great that they would accept significant risks to stay competitive, with 67% saying they would risk more than their competitor to maintain competitive edge.
However, BFM CEOs recognized that trust cannot be sacrificed for innovation. 64% of surveyed BFM CEOs 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.
“CEOs in the banking and financial markets sector are keenly aware of the competitive benefits that generative AI will bring and are eager to move quickly,” said John Duigenan, Distinguished Engineer & General Manager, Global Financial Services Industry at IBM. “In their enthusiasm to embrace the benefits of this potent new technology, it’s critical that financial services leaders ensure their institutions are taking steps to engineer trustworthy AI designed to reduce risk and win the confidence of their customers, employees and regulators.”
Key Study Findings
BFM CEOs are hedging their bets on generative AI to stay competitive and are willing to take risks to achieve this.
- 57% of respondents believe that competitive advantage will depend on who has the most advanced generative AI.
- Two-thirds (66%) of those surveyed agreed that the potential productivity gains from automation are so great that they would accept significant risks to stay competitive and 67% said they would take more risk than their competitors to maintain a competitive advantage.
- However, customer trust was not a sacrifice CEOs are willing to make. 64% surveyed agreed that maintaining customer trust will have a greater impact on success than any specific product, and 83% acknowledged transparency in adopting new technologies is critical for fostering trust among customers and employees.
Productivity is a top priority but focusing on short-term targets may hinder long-term progress.
- BFM CEOs ranked tech modernization as their highest priority for the next three years.
- Productivity, profitability, and scalability were identified as the biggest challenges facing BFM CEOs over the next three years, with 46% agreeing that generative AI will be one of the most useful tools in helping them overcome these challenges.
- However, BFM CEOs identified the focus on short-term performance as their top barrier to innovation.
