Finance sector unprepared for AI

Over one-third of the UK’s largest financial services companies believe artificial intelligence (AI) will transform the industry, but 36% do not think their infrastructure is ready.

Saturday, 30th March 2019 Posted 5 years ago in by Phil Alsop

Over one-third of IT decision makers in the UK’s largest financial services companies believe that AI will transform the industry in the next decade, but the same percentage admit that their infrastructure is not prepared for the transformation, a new survey conducted by Digital Realty reveals.

AI’s potential to transform hugely outpaces other much-hyped technologies, with leaders naming blockchain (21%), internet of things (IoT) (11%), application programming interface (API) platforms (10%), and robotic process automation (RPA) (10%) falling behind AI in their potential for the industry.

The financial benefits of these new technologies are potentially huge but the ability of IT leaders to prepare their businesses for these new technologies is restrained by budget (40%) and legacy infrastructure (31%). The survey highlighted that across the UK, businesses need to invest a total of £11.4 billion to be ready for these new technologies, but they will need to do this in order to keep up with the challengers – identified by 20% of IT leaders in the industry as their biggest technological challenge.

AI is going to revolutionise every industry, making businesses faster and cheaper to operate, creating new opportunities and adding an additional estimated £10 trillion[i] to global economic activity by 2030.

Processes already seen as the norm in the financial services industry, such as fraud detection and stock trading, are made possible by AI. Financial institutions are increasingly looking to AI to aid customer communication, predictive analytics, trade processing, and intelligent investment solutions.

To seize these opportunities, businesses will need to meet new processing and interconnectivity demands. The challenge is leading them to look to cloud and data centre partners for the purpose-built infrastructure, rapid low-cost interconnection, and simple management of these complex data environments that can underpin their AI ambitions.

Digital Realty and IDG research predicted that in the next two years, 48% of large financial services businesses will move their workloads to cloud wherever possible and just 27% expect their workloads to remain on-premise[ii].

Val Walsh, Senior Vice President, Portfolio Management at Digital Realty, commented: “The financial services industry is set to see some astonishing technological growth, and our new research demonstrates that companies in the sector are still underprepared for what’s to come. Technology like AI will greatly benefit the industry, but companies can only experience the full benefits of the technological revolution if their infrastructure is able to support these technologies.

“Key decision makers need to put infrastructure investment high on their agenda as the future is becoming increasingly data-led, so whilst there is an initial financial sacrifice, financial services firms can expect to see a healthy return on their investment in the long-term, and they should look to data centres and providers for their infrastructure upgrade.”