Majority of European financial services leaders expect Generative AI to significantly affect productivity and change roles – but many firms still lack plans to upskill their workforce
Leaders across Europe’s financial services sector expect Generative Artificial Intelligence (GenAI) technologies to deliver a windfall to productivity, according to the new EY European Financial Services AI Survey, which finds that 77% of respondents are bracing for a significant impact to their workforce and operations.
The survey, which canvassed the views of executives from 60 European financial institutions – including listed firms representing an aggregate market cap of £507.7bn – in October 2023, found that two-thirds (68%) of respondents anticipate that up to a quarter of all roles will require AI training or upskilling over the next six to 12 months, with 17% believing it could be as much as half.
However, action to realise productivity gains and workforce development through training and upskilling remains limited. More than a third of respondents (35%) said they currently have no plans in place to train their workforce in new and rapidly evolving GenAI technologies, while a further 42% described their plans as being “in their infancy”. Taking a more focused approach, 12% of leaders stated that they have training in place for targeted groups and just 10% reported having developed plans in use. Only 2% of respondents believe that their workforce is fully equipped to contribute end-to-end to building AI capabilities across their organisation.
European finance leaders plan to increase capital allocation to GenAI
The survey confirms that expenditure on GenAI is already widespread within Europe’s financial sector: over the past six to 12 months, nearly two-thirds of respondents (60%) said their firm has actively invested in the technology. Looking ahead, sector spending on integrating these technologies is set to rise over the near-term, with 75% of executives planning to increase spending over the next six to 12 months.
Ayman Awada, EY EMEIA Financial Services Technology Consulting Leader, comments: “Europe’s financial leaders are investing in AI technologies, targeting increased productivity, customer benefits and operational efficiencies. However, 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.
“GenAI technologies and the potential of their applications continue to evolve rapidly. Financial services leaders must ensure that they are adopting a strategic mindset as they manage their investment, both in new technologies and their people. Bringing together the best of human-driven insight, with the breadth of GenAI capabilities, will be fundamental to successful GenAI integration.”
GenAI expected to change the face of graduate and entry-level roles
The impact of AI on entry-level and graduate talent is in focus for banks, insurers, and asset managers; 60% of executives surveyed expect new technologies to have a significant impact on the roles and tasks undertaken by those joining the workforce. To manage the impact, 35% of executives said they plan to integrate AI training within their graduate program, while a quarter (25%) are planning a more widespread restructuring of roles and responsibilities across entry-level positions. Another 28%, however, said they have not taken any action to offset potential knock-on impacts.
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 European financial services leaders were an innovative and interdisciplinary mindset, followed by being tech savvy and experimental.
The area of expertise most in demand from skilled talent, specifically in reference to AI integration over the next two years, is data science and innovation (the top choice for 45% of executive respondents), followed by information and technology (24%) and operations (14%).
Omar Ali, EY EMEIA Financial Services Managing Partner, comments: “After more than three decades of major digital transformation across financial services, the rise of Generative AI is demanding yet another new set of skills for firms.
“Across Europe’s financial boardrooms, GenAI is prominent on every agenda. European financial services leaders are focused on developing the next generation of talent, for whom the use of innovative technologies in how they work and learn will become second nature. It is encouraging to see high levels of forward planning and development of graduate programs which are focused on building new skills that will be needed to compete both in market and internationally. While Europe’s boardrooms continue to assess the skills, expertise, and ethical considerations required to manage the risks and benefits of GenAI, steps to develop future, junior talent must also remain a priority.”
AI knowledge, future regulation, and ethics are leaders’ top concerns
When asked to consider the top concerns presented by GenAI integration, European financial services leaders were most likely to cite limited understanding and experience of GenAI applications and their impact across the workforce (36%), followed by uncertainty about existing and pending potential regulatory impacts (29%), and ethical issues around GenAI (7%).
Concerns around the ethics of GenAI are centred on privacy (cited by 32% of all respondents), followed by transparency and explainability (23%), and the potential for discrimination, bias, and lack of fairness (23%). To manage potential ethical implications arising from GenAI integration, nearly a fifth (18%) of respondents claimed they have already put an AI ethics framework in place, with a further 30% in the early stages of development. However, approaching half (45%) of respondents stated their firm is yet to develop an AI ethics framework.
In terms of accountability, half (50%) of respondents reported that their firm’s technology team will be responsible for the integration of AI across the business, reporting to the Chief Information Officer (or equivalent position). Nearly four in 10 (38%) respondents said their firm remains in the process of defining lines of accountability.
Ayman Awada, EY EMEIA Financial Services Technology Consulting Leader, comments: “GenAI technologies are changing operations, processes and customer experiences across the financial services sector, yet concerns around understanding, skills gaps, regulatory impacts and ethics remain prominent. Firms operating across multiple jurisdictions may also be considering the commercial and operational impacts of divergent regulatory regimes. 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.”