The use of artificial intelligence (AI) is quickly expanding within the financial services industry in the US, according to a new report from Broadridge Financial Solutions, a provider of technology to banks, brokers, asset managers, and other businesses.
Broadridge surveyed 153 financial services professionals at the Securities Industry and Financial Markets Association (SIFMA) Operations Conference & Exhibition in May 2019, and found that the sector's top priority for AI applicationsis data mining, cited by 36% of the respondents. That was followed by post-trade processing (20%), market analytics (13%), and trading systems (12%).
A majority of respondents (84%) said their company is in or past the "Enlightenment Age" of AI, during which they are at or beyond proof of concept. Twenty-nine percent have moved into the "Industrial Age", with pilot programs, and 20% are in the modern "Information Age," with AI in full production.
Although most companies in the industry are in some stage of AI adoption or at least exploration, 10% said they have no current plan to leverage AI.
The top motivations or desired outcomes for investing in AI include increased efficiency and productivity, cited by 53%, enhanced data and security (69%), and the ability to redeploy human capital (51%).
It's encouraging that a high number of respondents understand the advantages of AI's capabilities, the report said, but roadblocks continue to impede implementation. Nearly half of the survey respondents (46%) cited legacy technology as their top challenge.
Other challenges are the cost of investment, cited by 31%, and gaining executive buy-in, mentioned by 7%.
While most organizations recognize that AI is a transformational technology with huge potential impact, their approach to adoption has been cautious, noted Michael Tae, head of strategy for Broadridge. The survey data showed that firms need to first establish a clear strategy and framework in order to harness the power of AI and successfully increase its adoption, he said.
Another new report, from Transparency Market Research (TMR), predicts that the global AI market will expand at a compound annual growth rate (CAGR) of 36% through 2024. Among the drivers for growth are the increasing rate of adoption of big data technologies and the application of AI to large volumes of data. Also contributing to the rise of AI are technological advancements in areas such as advanced digital assistance.
North America accounts for a leading share of the global market (38%), owing to robust research and development, the report said. The AI market includes applications such as deep learning, smart robots, image recognition, digital personal assistants, language processing, gesture control, video analysis, speech recognition, context aware processing, and cyber security.
Challenges to market growth include a lack of technical expertise and concerns over data loss or theft.