- Finance will be “at the forefront” of changes driven by artificial intelligence, says a new report from Citi.
- Banking jobs are most at risk of being displaced by AI, the report said.
- Adoption of AI in finance, however, will be slow due to regulatory challenges and other factors.
AI is already thought to have the potential to profoundly transform jobs in every industry. ButAccording to one New report From Citigroup researchers, “Finance will be at the forefront of the changes.”
“What a bank or financial firm, be it retail or wholesale finance, looks like in the mid-2020s looks very different than it did in the mid-1980s or the mid-1940s,” the report said. I was told. “AI will repeat this cycle, possibly accelerating it.”
While general-purpose technologies, or GPTs, create new opportunities for innovation and can improve quality of life, “they also disrupt existing ways of working,” the report added. It was said. “And thus, they also produce losers, especially in the short term.”
With data from Accenture Research and the World Economic Forum, Citi researchers said about 67 percent of banking jobs have a “high potential” to be automated or augmented by AI. This means that “banking jobs” (which the report did not briefly define) have the highest potential for AI-led job displacement.
However, according to Citi, headcount reductions could be partially or fully offset by the addition of AI-related compliance managers and ethics and governance staff.
One upside Citi points out, however, is that they estimate that the 2023 global banking sector profit pool “could increase by 9% or $170 billion from AI adoption, compared to just $1.7 trillion. could rise to over $2 trillion.”
AI adoption in finance will slow.
Citi researchers believe that “the pace of implementing advanced AI tools in financial services, particularly GenAI, will be relatively slow compared to other sectors,” they said in the report, “due to the highly regulated nature of the sector. Because of this, and the lack of 'ready to go global standards'.
“A regulatory landscape is evolving in some jurisdictions, but when it comes to implementation, it's a tough road for financial services firms because countries are moving at different speeds, different approaches to regulation. are taking a view and in some cases changing their position on whether to regulate,” he said.
In an interview included in the report, Shamik Kundu, head of financial services and chief strategy officer at TruEra, weighed in on the same point.
“I would describe traditional AI adoption in financial services as: broad, low, and redundant,” Kondo said.
“A large number of enterprises are experimenting with AI in various use cases,” Kondo points out, “yet there is limited adoption of AI across use cases” and “failures of AI systems on critical business operations.” Limited perceived impact”.
He cited a 2022 Bank of England survey, which found that “72% of firms reported using or developing machine learning applications,” yet “for mainstream UK financial institutions The average number of ML applications is only 20-30” and “already less than 20% of the few AI use cases were business critical.”