Dive Brief:
- U.S. banks outpace their global counterparts in AI adoption maturity, according to Finastra data published Tuesday. Financial services organizations in the U.S. have 65% of their AI use cases in active deployment, compared with 61% of global businesses.
- AI adoption efforts are expected to continue as 42% of U.S. financial companies plan to accelerate AI investments by more than 50% this year, the software company’s report found. Findings were based on a survey of 1,509 financial leaders from 11 regions, including the U.S., U.K., Japan, Germany and France.
- Half of U.S. executives surveyed said regulatory and compliance hurdles are a barrier to scaling modernization efforts, compared to 40% of global executives, according to Finastra.
Dive Insight:
While U.S. financial executives view the pace of technological change with optimism, they’re also facing regulatory challenges and skills gaps as they modernize tech stacks and adopt AI.
Part of the regulatory dilemma stems from rising data sovereignty concerns, the Finastra report found. U.S. firms are more likely to prioritize implementing data handling controls, “even if it slows the pace of modernization,” the report said.
Another 50% of U.S. executives reported talent and skills gaps as a barrier to technology modernization and AI adoption compared with 43% of global executives.
Demand for digital skills is outpacing available talent, especially in the U.S., Singapore, Japan and the United Arab Emirates, according to Finastra.
“To fully realize this moment, the industry must work together to bridge the talent gap and navigate an increasingly complex regulatory landscape,” Finastra CEO Chris Walters said in a press release.
Last year, the Fintech Open Source Foundation launched a coordinated effort with banks including Citigroup, Morgan Stanley and Bank of America supporting the Common Controls for AI Services initiative. The effort aims to define vendor-neutral controls for safe AI adoption in the financial services industry.
It’s also attempting to provide financial services firms with a clearer path for adopting AI amid changes in the regulatory environment at the federal level.
“Bank of America is proud to support FINOS’ mission to establish an industrywide AI controls framework,” Duncan McInnes, CIO for global markets at Bank of America, said in a press release at the time. “Their collaborative method toward establishing a standardized AI governance approach will help strengthen the financial services industry’s ability to deliver secure and innovative AI solutions.”
U.S. financial services firms focus their live AI use cases in data analysis and reporting, document intelligence extraction and credit underwriting and decisioning more commonly than global financial services firms, according to Finastra.
Additionally, 42% of companies in the U.S. banking industry indicated that their customers expect a mix of human and digital interactions, compared with 30% globally.
