Article Synopsis :
This report from Deloitte looks at how the frontrunners among financial institutions might provide examples of how to effectively integrate artificial intelligence (AI) into a business strategy.
But just who are the front runners? The authors identified three distinct characteristics that are common to the trailblazers. They are able to: embed AI in strategic plans and emphasise an organisation-wide implementation plan; focus on revenue and customer opportunities, not just cost reduction; and adopt a portfolio approach for acquiring AI, where multiple development models are used to implement AI solutions.
Even more stark is the differences between those who are leading the charge and those who are following or who have barely started. They are four times more likely to understand the critical importance of AI than followers and 12 more than the starter group.
Recognising the critical importance of AI to the overall business success is likely to be the greatest factor in them adopting an implementation plan that takes a holistic view across the enterprise. These are the ones that launch AI centres of excellence and start comprehensive, companywide strategies for departments to follow.
Investing for the future
Perhaps unsurprisingly, these frontrunners are investing more heavily in AI and accelerating their spending at a higher rate.
Almost half (45%) of those surveyed had sunk more than US$5 million into AI projects compared to 27% of followers and only 15% of starters
Almost three quarters (70%) plan to increase their spend on AI 10% or more over the next year. Only 46% of followers have made a similar commitment with 38% of starters,
Not home and hosed
In addition to cost reduction, frontrunners are focused on revenue and customer opportunities. They are also seeing greater success from this focus, achieving better business outcomes across revenue objectives.
There is still a lot of work for frontrunners to do. There are many risks that require adaptation of governance structures. Making the wrong strategic decision remains a major risk, but is subordinate to the vulnerabilities of this technology to cyber criminals.
Businesses that may not be frontrunners, but aspire to be should focus on four key objectives, says the Deloitte report:
- Start purposefully and be bold;
- Get early wins under your belt;
- Emphasis organisation wide implementation once experience and success is achieved;
Adapt governance and risk structure to scale AI implementation.
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Digital Insurer's CommentsIt is clear from this report that frontrunners are making inroads into their transformation and some are achieving success that is adding to the bottom line. But it remains early days and there is a long way to go.
That said, it is clear that those who haven’t started are being left behind. Even those who have begun must be mindful of to implementing changes in a piecemeal fashion without clear direction for each part of the business. That only results in disconnections in the culture, a lack of ownership and siloed processes that will never be integrated.
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