A recent report from Citi suggests that artificial intelligence (AI) will play a significant role in reshaping the finance industry, with banking jobs being the most vulnerable to automation.
AI Displacement in Banking Jobs
The report highlights that AI-driven displacement poses a substantial risk to banking jobs, indicating that the adoption of AI technologies in finance will lead to significant changes in the industry.
Slow Adoption of AI in Finance
Despite the potential benefits of AI in enhancing efficiency and innovation in finance, its adoption is expected to be slow. This is primarily due to regulatory hurdles and other challenges that financial institutions face.
Impact of AI in Finance
The report underlines that AI has the capacity to revolutionize the banking sector, leading to a transformation in the way financial services are delivered. While AI technologies create new opportunities for growth and development, they also pose challenges by disrupting traditional processes.
Job Automation Potential
According to data sourced from Accenture Research and the World Economic Forum, approximately 67% of banking jobs have a high potential for automation or augmentation through AI technologies. This suggests that a significant portion of banking roles could be impacted by AI-led automation.
Future Outlook for Banking Sector
Citi estimates that the adoption of AI could potentially increase the profit pool of the global banking sector by 9%, amounting to a rise of $170 billion. This growth is projected to elevate the global banking profit pool from $1.7 trillion to nearly $2 trillion by 2023.
Challenges in Implementing AI in Finance
The report identifies regulatory hurdles and the complex nature of the financial sector as key challenges in implementing AI technologies. The highly regulated environment and the lack of globally aligned rules make it challenging for financial institutions to adopt AI at a rapid pace.
Shameek Kundu, a financial services expert, emphasized the slow progress of AI adoption in financial services, citing a discrepancy between the widespread experimentation with AI and the limited scale of adoption across critical business functions.
As financial institutions navigate the evolving regulatory landscape and strive to integrate AI technologies effectively, the future of AI in finance remains a topic of ongoing discussion and exploration.
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By: ebrownstein@businessinsider.com (Emmalyse Brownstein)
Title: AI Could Automate Over Half of Banking Jobs, but Adoption Will Be Slow, Citi Report Reveals
Sourced From: www.businessinsider.com/ai-could-automate-more-than-half-of-banking-jobs-citi-2024-6
Published Date: Wed, 19 Jun 2024 20:15:16 +0000
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