The majority of European bank leaders expect generative artificial intelligence (GenAI) to disrupt how staff do their jobs, and there is a widespread belief that GenAI will shake up entry roles in particular.
These are the headline findings of Ernst & Young’s (EY’s) October 2023 Financial Services AI Survey, which asked heads of European financial services about GenAI’s potential uses.
It found that more than 80% of European bank leaders expect that up to a quarter of all roles will require upskilling over the next year, although most lack action plans for this.
Some 59% of European bank leaders anticipate AI adoption will significantly affect entry level roles, with 22% planning to use AI training within graduate programmes.
EY’s survey of 60 financial services firms across Europe about the potential influence of AI shows that its integration with existing company practices will not be easy, and will require careful thought about how the technology is deployed and managed.
Increasing capital allocation to GenAI
Expenditure on GenAI appears widespread within Europe’s financial sector: nearly 60% of respondents said their firm has actively invested in the technology over the past six to 12 months. Looking ahead, sector spending on integrating these technologies is set to rise in the near term, with 75% of executives planning to increase spending over the next year.
Investment in AI technologies is targeting increased productivity, customer benefits and operational efficiencies, says Ayman Awada, EY’s Europe, Middle East, India and Africa (EMEIA) financial services technology consulting leader.
Bringing together the best of human-driven insight with the breadth of GenAI capabilities will be fundamental to successful GenAI integration, says Mr Awada. “The challenge of enabling the workforce to realise and capitalise on potential gains requires in-depth, long-term planning, which is not yet in full force,” he adds. “Financial services leaders must ensure that they are adopting a strategic mindset as they manage their investment, both in new technologies and their people.”
Roles will change
From graduate roles to the firm’s chief information officer (CIO), Nigel Moden, EY EMEIA banking and capital markets leader, says that holistic governance is key to successful AI integration and understanding.
“Governance around AI in individual organisations is much more rounded than just giving the CIO a few million dollars to integrate AI,” he says. “In practice, what we’re seeing is organisations forming committees that include compliance, risk and legal teams, as well as incorporating business and technology lines, so that any new use case is really put through a multi-lens decision-making process.”
AI will not be a substitute for human insight despite its increasingly central role in modern banking, he adds.
The impact of AI on entry-level and graduate talent is a key issue for banks, insurers and asset managers; 60% of executives surveyed expect new technologies to have a significant impact on the roles of those joining the workforce.
To manage the challenge, at least a third of executives reported plans to integrate AI training within their graduate programme, with a quarter looking to a more widespread restructuring of roles across entry-level positions.
When asked to consider the top attributes that firms will seek as they recruit entry level talent for a GenAI-enabled workforce, the traits most cited by respondents were an ‘innovative and interdisciplinary mindset’, followed by being ‘tech savvy’ and ‘experimental’.
In the survey, data science and innovation emerged as the most in-demand area of expertise among skilled talent. This was specifically in reference to AI integration over the next two years.
Top concerns
Concerns about understanding, skills gaps, regulatory impacts and ethics remain prominent. Limited understanding and experience of GenAI applications and their impact across the workforce was cited as a top concern of GenAI integration.
This was followed by uncertainty about existing and pending potential regulatory impacts, as well as the ethical issues GenAI brings.
These include concerns about privacy, followed by transparency and explainability, and the potential for discrimination, bias and lack of fairness. To manage potential ethical implications arising from GenAI integration, nearly half of respondents said their firm has yet to develop an AI ethics framework.
“Defining how organisations are going to approach, develop and integrate new capabilities across operations is a critical first step to ensuring that firms are well positioned to mitigate risks, while effectively harnessing the benefits afforded by GenAI,” Mr Awada says.
Firms operating across multiple jurisdictions might also consider the commercial and operational impacts of divergent regulatory regimes, he adds.
