Fifty One Degrees has conducted a research study, showing that an overwhelming 84.6% of processes within the realms of banking, insurance, FinTechs, and other financial services could see significant enhancements from AI technology, leading to a potential increase of £41.7bn in the sector’s economic output.
According to the findings, AI implementation could boost the efficiency of 80% of tasks, and just over half could witness a notable improvement in quality when AI is applied. GenerativeAI (GenAI) stands out as the premier AI technology for the financial sector, with potential benefits for 74.9% of tasks. The analysis particularly highlights that internal tasks and processes could see the highest efficiency gains, with a 41% improvement, in contrast to a 34% enhancement for tasks facing customers. Additionally, GenAI’s adoption could amplify the financial services industry’s economic output by as much as 15%, resulting in an extra £41.7bn in output.
Today, AI consultancy giant Fifty One Degrees unveiled a groundbreaking study that shows nearly 85% of tasks and activities within financial services firms could significantly gain from the deployment of generative AI technologies.
This detailed investigation evaluated 311 tasks and activities across fourteen diverse functions within the sectors of banking, insurance, and financial services, exploring the benefits of various AI technologies and forecasting the potential advantages.
GenAI is currently identified as the most influential AI technology in the Financial Services sector.
The research posits that GenAI Assistants, tailored to assist team members in specialized functions, could positively influence three-quarters of the tasks carried out by firms in financial services and insurance. These assistants are adept in specific policies, procedures, and regulations, proving especially valuable in areas that deal with extensive natural language information, such as Compliance, Legal, Risk Management, and Underwriting. These AI assistants could either increase staff productivity or fully automate certain processes.
The study also discovered that other AI tools, largely driven by Generative AI and Large Language Models, would follow GenAI in terms of impact, affecting 39% of activities. These include a variety of tools such as AI-enhanced training modules, legal aids, financial tools, and others.
Teams dealing with policy, data, tech, or customer relations are likely to see the most substantial impact.
The findings indicate that departments like Analytics & Data Science, Technology, Customer Services, and Underwriting could not only improve efficiency but also the quality of output through GenAI usage. Conversely, functions such as Compliance, Enterprise Risk, and Legal are expected to see major efficiency improvements, though the enhancement in the quality of output might not parallel these gains.
The economic impact of GenAI on the banking and financial services is significant.
Recent estimates suggest that Generative AI could contribute between $2.6 trillion and $4.4 trillion annually to global businesses, with the Financial Services and Insurance sectors potentially seeing benefits of $200 billion to $340 billion, which corresponds to 9 to 15 per cent of operational profits. The UK financial and insurance sectors, which generate £278bn in economic output, could see a 15% increase from GenAI, translating to an additional £41.7bn. As the financial sector plays a critical role in the UK economy, constituting 8.3% of it and employing 2.5 million individuals, advancements in this sector could have extensive implications for the wider UK economy.
Nick Harding, co-founder and CEO of Fifty One Degrees, remarked on the significance of the findings: “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.”
