A study by Microsoft Asia and IDC Asia/Pacific found that organizations with AI expect to see 41 percent improvement in competitiveness in three years. The Future Ready Business: Assessing Asia-Pacific’s Growth with AI also found that more than half (52%) of the region’s FSI organizations have already started on their AI journeys. This is higher than the Asia-Pacific average of 41%, indicating that the sector is more advanced than others in the region.
“The digital economy has resulted in demands for organizations to reinvent themselves such that they remain relevant to their customers. To do so, FSI organizations need to address three key imperatives — how to leverage data and AI for their operations, how to build and maintain trust among their customers, and how to tap on partnerships to drive innovation to stay ahead of the game,” said Connie Leung, Senior Director, Financial Services Business Lead, Microsoft Asia.
FSI organizations that have already started on their AI journeys saw improvements in areas such as better customer engagement, higher competitiveness, accelerated innovation, higher margins, and improved business intelligence, recorded in the range of 17% to 26%. By 2021, organizations expect between 35% to 45% improvements in these areas, with the biggest jump in the rate of higher margins (estimated increase by 2.1x.).
FSI organizations need to build on capabilities, infrastructure, strategy and culture
The study found that 9 in 10 business leaders from the FSI sector agree that AI is instrumental to an organization’s competitiveness. However, the top adoption challenges faced by FSI organizations include lack of skills, resources and continuous learning programs, lack of thought leadership and lack of advanced analytics and tools.
“Companies still face challenges in maximizing AI’s ability to accelerate their transformation journeys. Often, they are hindered by various challenges that spread across infrastructure, skills and culture. Hence, we need to look at AI deployment and development from a more holistic perspective,” said Victor Lim, Vice President, Consulting Operations, IDC Asia/Pacific.
The study evaluated six dimensions contributing to the AI Readiness of the industry, including Strategy, Investments, Culture, Capabilities, Infrastructure and Data. While FSI organizations are ahead of the average Asia-Pacific organization in all dimensions, they are lagging AI Leaders in areas like Capabilities, Infrastructure, Strategy, and Culture.
AI Leaders make up 6% of organizations in Asia-Pacific. These Leaders have already incorporated AI into their core business strategy and nearly doubled their business benefits today as compared to other organizations.
Compared to the rest of the organizations in Asia-Pacific, AI Leaders are more likely to:
- Increase investments every year to support an organization-wide AI strategy
- Have a centralized team of specialized roles to develop and validate AI models for the organization
- Have advanced AI analytics and tools such as Robotic Process Automation and Natural Language Processing in their existing technology mix
- Have in-house capabilities of developers, specialists and data engineers
- Have ongoing enterprise data governance practices jointly performed by IT, business and compliance teams
One key example of an AI leader is Moula, an Australian founded organization that uses AI to assess business loan applications made online. Recognizing the importance of small and medium businesses to Australia’s economy — most of the country’s 2.3 million businesses are classed as SMB — the company established an Azure based real-time credit decisioning service and leveraged Azure AI and machine learning capabilities to predict the probability of the SME being able to pay back its loan. Successful applications can result in business loans of up to $500,000 being made available in 24 to 48 hours. “Small business is the engine room of Australia’s economy. It’s where most people work, and without small business, big business simply cannot function. The vision of Moula in terms of liberating the value in small business data is impressive, and the partnership with BizData using Microsoft technology to bring that vision to life is a prime example of collaboration across our ecosystem to bring about not just business transformation, but sector transformation,” said Paul Pesavento, Chief Data Officer, Moula.
C-level executives must adopt AI-driven culture for organizational-wide transformation
The study found that almost 50% of FSI business leaders and more than half of the sector’s workers believe that the cultural traits and behaviours that contribute to organization-wide AI adoption are not pervasive today.
Technological and social-emotional skills required in an AI-ready workforce
62% of business leaders and 67% of workers agree that AI will augment — rather than displace — jobs. Despite being generally positive about the impact AI will bring to jobs in the FSI industry, the study identified an acute shortage of technological and social-emotional skills. The top three skills identified by business leaders that will face demand issues include scientific research and development, digital skills, as well as adaptability and continuous learning