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Where Do We Go from Here?
7 min read
The financial services industry has a long history of embracing innovative technology. From the introduction of ATMs in the late 1960s, through to online assistance in the 1990s, and on to digital wallets & Blockchain, there are plenty of high-profile examples that have permanently altered the landscape for both clients and providers.
However, the current adoption, applications and potential of AI for financial services firms looks to represent the most transformative of all these tech innovations. As in previous cases, it’s ultimate focus is bringing increased benefits and value to clients, while streamlining operations for financial services firms and their teams.
It’s also now clear that the use and advantages of AI have rapidly become the expected standard for financial services firms, with global spending in this area predicted to increase from £27.5 billion in 2023 to almost £75 billion by 2027.
The rate of change in the financial service world continues to increase too, with constantly evolving complexity in much freer markets than ever before. This means that firms must find ways of reacting, tracking and even predicting these changes if they are to retain any competitive advantage and remain successful.
In short, falling behind could be fatal.
We’ve all seen how AI has already become essential for elements of risk management, forecast demand and boosting billable hours through maximised productivity.
Applications such as Microsoft Copilot have liberated financial services roles from many of the time-consuming manual tasks associated with report generation, documentation and regulatory compliance.
Similarly, the client experience in financial firms has benefitted from AI tools that offer enhanced customer service through chatbots and 24/7 reaction times for access and information. Smart onboarding and support maintained by AI technologies is quickly delivering a more personalised customer journey with much greater engagement, all of which is fantastic for client retention too.
However, this looks to be simply the foundation for what’s around the corner.
The next five years look destined to be pivotal for AI in financial services firms as the technology matures and new opportunities and use cases continue to develop. At this stage, it’s possible to identify areas where its potential is going to be realised very soon.
Automating through Agentic AI will have a significant impact on both front & back-office roles, with digital workers becoming more prevalent that will inevitably make staff costs leaner. Credit analysis and underwriting with AI will markedly speed the process up with approval times becoming much quicker. Data analysts at all levels will also feel much more AI support in the initial wrangling and building of data sets and dashboards to allow focus on faster decisions at greater volumes. And allowing AI technology to connect in a cohesive way will make discovering anomalies across data and report comparison a far simpler process too.
The next generation of AI tools for financial services will mark a watershed moment for both providers and governing bodies. Client transactions and behaviour will be subject to continuous monitoring in ways that free them from human error in a proactive way to drive greater security. Similarly, the governance and compliance required looks set to apply AI in a more formal and transparent way, with higher standards expected of firms through greater documentation, risk identification and faster reaction times.
The data available for AI forecasts is already impressive, with a recent study by McKinsey showing that AI powered risk assessment modelling can improve underwriting accuracy by 30%. The vast datasets that AI tools can incorporate will mean that the capability to model using economic indicators, market sentiment, social media activity alongside proprietary client information will become available for even smaller firms. This capability could have a democratising effect for competitive advantage, and therefore building a foundation for it now is strongly advised.
As ever with technology it’s people that decide, and the personalisation offered by AI will go deeper to achieve much more engagement for financial services. Alongside the already developed convenience and access tools, the products themselves will be created in a more tailored, adaptable and valuable way to suit clients based on their observable habits, requirements and behaviour.
It’s safe to assume that the eyes of investors for financial services firms will already be looking for demonstrable evidence of AI strategy and road mapping. With the potential for a much healthier looking bottom line through AI supported productivity and resource efficiency, scalable revenue growth becomes a lot simpler to forecast. And an understanding of how embedded AI tools will become in your firm also highlights futureproofing and readiness for the next generation of compliance.
Future talent will already be familiar with the technology, and an AI-enabled culture needs to go far beyond the current buzzwords and capability, to stand out. Market positions in the next five years may very well depend on decisions that are being made right now with these elements in mind.
Transformative technology can often be divisive in terms of mass adoption across teams and people. It’s incredibly important that the right philosophy of encouraged adoption and elevated cyber security for financial services firms is fostered for AI.
Using small-scale AI projects with measurable improvements and returns is a great way to get buy-in and highlight value. Using trusted and secure frameworks, such as Microsoft Purview, for data security allows people to grow in confidence using AI tools with Copilot a great way to begin experimentations for efficiency and productivity.
Perhaps the most important thing is to take your people on the journey with you for AI applications. Auditing your current processes, security measures and workflows together will identify possible use cases and can offer opportunities for increased cybersecurity in the appropriate way. Leadership driven and all hands inclusive is the perfect approach to start sketching your AI strategy for the short and mid-term, all in a well-documented way.
Put your security to the test
BCN is at the forefront of applied AI tools for the financial services industry. Our solutions are created with thorough research, testing and training before being integrating into client IT infrastructures.
Our status as one of the very few MSPs in the country to hold all six Microsoft partner accreditations for the modern workplace puts us at a great advantage. Specifically, our experience as a Microsoft partner for Data & AI is a fantastic resource that every BCN client will benefit from.
Explore other resources and insights from our team
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