Financial Services Must Embrace AI, Automation to Compete Against Disruptors: Report

“…45 percent of the financial services firms surveyed for the report said that they see major tech companies like Apple and Google as their key competitors over the next five years.”

AI and smart automation could add up to $512 billion in revenues to the financial services industry over the next couple of years, according to a new report from Capgemini’s Digital Transformation Institute.

That kind of growth is possible through the right combination of artificial intelligence, automation, and good old fashioned business process optimization, according to the study. But automation will be the key driver, offering a 10-25 percent cost reduction, which can be extended to 30-50 percent through AI-enhanced automation. Meanwhile, organizations are also seeing topline growth in the area of two to five percent thanks to intelligent automation, with additional benefits in customer satisfaction.

While that all makes for a tasty carrot in terms of incentives, there is also a stick: 45 percent of the financial services firms surveyed for the report said that they see major tech companies like Apple and Google as their key competitors over the next five years. These companies are already trying to disrupt financial services through new technologies, and conventional organizations are going to need to embrace automation and AI to stay competitive.

There are challenges, of course. Forty-one percent of the businesses surveyed reported difficulty in persuading managers to commit to an intelligent automation strategy, and 48 percent say they don’t have all the right resources to implement such a strategy effectively. But given the opportunities that AI-driven automation offers, and the risks that go along with inaction, it seems clear enough that the most successful financial services players are going to find a way to overcome these obstacles.