AI-powered Asian Financial Institutions to See 41% Improvement in Competitiveness by 2021
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Asian financial services institutions which use artificial intelligence are expected to see a 41 percent improvement in competitiveness by 2021, a Microsoft Asia and IDC study released recently showed.
Over half of the region’s financial institutions that have already started incorporating AI into their broader framework have seen improvements in areas such as better customer engagement, higher competitiveness, higher margins, and improved business intelligence, according to the study.
“Financial organizations need to address three key imperatives – how to leverage data and AI for their operations, how to build and maintain trust among their customers, and how to tap on partnerships to drive innovation to stay ahead of the game,” Connie Leung, senior director of financial services business at Microsoft Asia said.
Institutional financial companies, like asset managers, banks, and insurers, have all been investing in technology to make their processes more efficient, and, most importantly, tap into the growing, financially savvy millennial population.
Robo-advisors, online account openings with instant, automatic verification, and wallets that can analyse and optimise consumer spending, have been instant hits with customers, and nine out of ten financial companies now agree that AI is instrumental to an organisation’s competitiveness.
But, There Is a Problem
Even though AI is on the rise, only half of Asia Pacific’s financial companies use it.
Some of the biggest hurdles faced in the adoption of AI include lack of skills, resources and continuous learning programs, lack of “thought leadership”, and lack of advanced analytics and tools, the Microsoft Asia/IDC study said.
64 percent of the workers polled by the study said that employees are not empowered to take risks, or make decisions autonomously. 58 percent said that senior leaders in the company do not encourage proactive innovation, and another 68 percent felt that employees do not take on tasks beyond their job descriptions. All these factors reduce AI adoption rates within organisations today, the study showed.
However, there is one simple solution to all this: getting the company’s senior management involved in the AI implementation process.
“To drive transformation, AI needs to be driven at the highest levels within the organization. Business leaders not only need to address data and infrastructure requirements but will also need to have a clear vision and encourage a continuous learning culture to empower staff across all levels to harness the potential of AI,” said Victor Lim, vice president of consulting operations at IDC Asia Pacific.
The Eternal Debate: Robots vs Humans
One of the main concerns businesses have today is if automation and AI would reduce human jobs, but 67 percent of the workers polled by the study said AI would augment, rather than displace jobs.
62 percent of the business leaders agreed with that as well.
“The industry needs workers who possess the right skills to support organizations in their AI journeys,” said Leung.