Selling AI-based solutions as a service is becoming a distinct business model, currently adopted by 45% of fintechs and 21% of incumbents, which allows firms to capitalize on larger and more diverse datasets through digital platforms. Novel insights are increasingly provided by using AI to analyse new or alternative datasets such as social media and geo-location data, with 60% of respondents making use of such data in their AI applications. Data quality and access to data and talent are seen as major obstacles to implementing AI by more than 80% of respondents each. Traditional financial services firms expect AI a 9% net reduction of jobs by 2030 while fintechs expect to increase their workforce by 19%. While views of regulatory influence on AI implementation diverge, most firms feel impeded by data-sharing regulations between jurisdictions and entities as well as regulatory uncertainty and complexity.

A new survey released by the World Economic Forum and the Cambridge Centre for Alternative Finance (CCAF) finds nearly two-thirds (64%) of financial services leaders expect to be mass adopters of Artificial Intelligence in two years compared to just 16% doing so today. These firms plan to expand AI use to purposes beyond cost reduction, using AI for revenue generation, process automation, risk management, customer service and client acquisition. In Transforming Paradigms: Global AI in Financial Services Survey, over 150 senior financial services executives in both fintech and incumbent financial institutions responded to a range of questions on the impact AI will have on the industry, concluding that there will be a significant gap between firms that quickly implement AI and firms that lag behind. Currently, 60% of firms invest less than 10% of their R&D resources on AI despite evidence of accelerating returns. Pay offs have shown to be especially strong between investment levels of 10% and 30% as well as investment levels of 30% and 40%.