GenAI in Financial Services: 2024 as the Year of Transformation?

Ryan den Rooijen – Chief Strategy Officer, Appsbroker & CTS

The hype around GenAI has reached fever pitch. From customer conversations, it’s clear the topic remains high on the agenda this year. In Financial Services, where both risk and reward loom large, this raises an urgent question: is the industry ready to harness its potential? While many will have explored GenAI capabilities as consumers, there’s some way to go in empowering employees with these technologies in a secure and well-governed manner. 

Our recent survey of Financial Services IT leaders paints a picture of an industry eager to embrace GenAI but acutely aware of the risks. A significant 73% see GenAI as a top priority, driven by the undeniable potential for disruption. All respondents believe GenAI can benefit their business somehow, with 93% saying they are ‘quite well’ or ‘very well’ positioned to take advantage of the technology. Yet, this enthusiasm is tempered by the spectre of past failures.

A Sense of Urgency

When looking at the survey findings and speaking to customers, there is a sense of an industry that wants to stay caught up. 85% of respondents worry they’ll become irrelevant if their organisation fails to get to grips with GenAI. Meanwhile, 63% are frustrated that their business is not taking a more forward-looking position on the technology itself. Perceived successes in these areas by disruptive fintech players will only add to the pressure that executives feel.

This sense of urgency is warranted, given the speed at which GenAI is already taking hold. 92% of IT leaders in Financial Services said GenAI is impacting their business and industry, while 88% feel it will have a ‘major’ or ‘totally transformative’ impact this year. There’s a sense of foreboding that if firms do not act fast, they’ll get left behind. And to be clear: those who use GenAI will gain a competitive edge. But those who rush in without a plan face the prospect of serious consequences, including regulatory and financial penalties, and reputational damage.

Digital Transformation

Some in the industry have had their fingers burnt by previous digital transformation efforts. Ballooning timelines, service outages, and even regulatory fines are not unheard of. This is not surprising. Change management is hard in complex environments and GenAI has a broad impact. That said, the stakes are higher than in past digital waves, with many old challenges still remaining.

Success requires more than tech and business understanding. It also needs strong data, agile governance, and secure cloud foundations. But these are often missing at old financial firms. Many organisations in a tough spot need to adapt to GenAI tech but haven’t completed the shift to digital.

Risks and Regulation

These foundations are key. Playing with GenAI chatbots is fun, but using AI models that affect customer outcomes, trading decisions, or risk assessments? That’s different. Over half of our respondents (52%) lack the skills and resources to use GenAI at scale. 67% worry about its accuracy and quality. Without enough understanding and knowledge, financial firms face a far less predictable future.

For example, the recent adoption of the EU AI Act has increased the burden on organisations to govern their AI applications by some margin. Particularly in areas such as credit scoring and loan applications, AI models are likely to fall in the Act high-risk category. This means strict rules for accuracy, transparency, and explainability. These topics are hard to tackle at the best of times, let alone when there’s big financial and reputational impact.

Speed vs. Strategy

So, how should organisations respond? The solution is counterintuitive: slow down to go faster. Focus on specific pain points. Map the processes GenAI could improve. Test your data. Is it reliable and as bias-free as possible? Is it also accessible to train and tune models well? Know your risk tolerance. Build in frameworks for explanation and governance from day one. This is not about stifling innovation, but laying the right foundations for scale.

At the end of the day, the winners in this race may not be the fastest. They will do it by combining their GenAI strategy with focused execution. The plan is based on business goals. It comes from a clear understanding of the technology’s potential and its real limits. It’s not easy. Organisations must either face up to the pressure of having to act now, or consider the consequences of standing still.


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