IBM study reveals BFM CEOs push AI adoption, face cultural and workforce challenges, and prioritize trust
Findings from the IBM Institute for Business Value show that banking and financial markets (BFM) CEOs face workforce and cultural challenges as they quickly implement and scale generative AI across their organizations.
Generative AI is viewed as crucial for competitiveness, with 57 percent of BFM CEOs believing that having the most advanced AI will provide a competitive edge.
CEOs are also dealing with cultural challenges in the AI era. About 59 percent of BFM CEOs said cultural change within a business is more critical than overcoming technical challenges when becoming data driven.
Additionally, 65 percent believe success with AI relies more on employee adoption than on the technology itself.
Despite this, 60 percent of BFM CEOs are accelerating AI adoption faster than some employees are comfortable with. Moreover, 43 percent of CEOs acknowledge that their employees do not fully understand the impact of strategic decisions on them.
Skills are another focus area for CEOs. Although 60 percent of BFM CEOs say their teams have the skills to incorporate generative AI, over half (53 percent) struggle to fill key technology roles.
Furthermore, 50 percent of these CEOs are hiring for roles that did not exist last year due to generative AI, indicating a rapid workforce shift.
“Our research shows the immense pressure on CEOs to maintain a competitive edge. Alongside profitability and productivity, acquiring the right skills remains a persistent challenge, with CEOs now hiring for roles that did not exist until recently,” stated Shanker Ramamurthy, global managing partner for Banking and Financial Markets at IBM Consulting.
“Workforce needs are shifting rapidly in the financial services sector, and CEOs must prioritize upskilling programs as a key element of their strategy for scaling generative AI.”
Additionally, 66 percent of BFM CEOs said the potential productivity gains from automation are so significant that they would accept substantial risks to remain competitive. About 67 percent indicated they would take more risks than their competitors to maintain an edge.
However, BFM CEOs recognize the importance of trust. About 64 percent agreed that maintaining customer trust is more impactful than any specific product or service, and 83 percent stressed that transparency in adopting new technologies is crucial for building trust among customers and employees.
“BFM CEOs understand the competitive advantages generative AI brings and are eager to adopt it quickly. In their enthusiasm, it's crucial that financial leaders ensure their institutions develop trustworthy AI to reduce risks and build confidence among customers, employees, and regulators,” noted John Duigenan, engineer, and general manager for Global Financial Services at IBM.
BFM CEOs are betting on generative AI for competitiveness and are willing to take risks to achieve this. About 57 percent believe competitive advantage hinges on having the most advanced generative AI.
Two-thirds (66 percent) agree that potential productivity gains from automation are worth significant risks, and 67 percent are willing to take more risks than competitors to stay ahead.
However, customer trust remains a priority. About 64 percent agree that maintaining trust will have a greater impact on success than any specific product, and 83 percent highlight the importance of transparency in adopting new technologies for fostering trust.
Half of the CEOs are hiring for roles that did not exist last year due to generative AI. More than half (53 percent) struggle to fill key technology roles. Sixty percent say their current team has the knowledge and skills to integrate new technologies like AI.
Only 40 percent have assessed the potential impact of generative AI on their workforce. CEOs project that 34 percent of their workforce will need retraining and reskilling over the next three years, up from just 7 percent in 2021.
CEOs link their organization's success to the quality of collaboration between finance and technology, but competition among C-Suite executives can impede collaboration. About 59 percent prioritize cultural change over technical challenges for becoming data driven.
Sixty-five percent say AI success depends more on employee adoption than technology. However, 43 percent acknowledge that employees do not fully understand the impact of strategic decisions. Sixty percent push for AI adoption faster than some find comfortable.
About 64 percent believe they must rewrite their organizational playbook to succeed. Seventy-two percent plan to maintain or accelerate transformational change in 2024.
CEOs rank tech modernization as their top priority for the next three years. They identify productivity, profitability, and scalability as the biggest challenges, with 46 percent viewing generative AI as a key tool to address these issues.
However, CEOs see the focus on short-term performance as the top barrier to innovation.
The study surveyed over 3,000 CEOs from more than 30 countries and 26 industries, including 297 BFM CEOs from retail, corporate, commercial, and investment banks.
