By Alexandra Mousavizadeh, CEO and co-founder of Evident
It’s been a year of staggering progress in the field of artificial intelligence (AI), and the race to safely and successfully harness the technology has reached a critical juncture for the world’s biggest banking institutions.
Many of these banks have been developing AI use cases behind closed doors for half a decade or more. What’s changed in 2023 is the mass shift in public understanding of AI, not to mention the growing concern about the unfettered use of these technologies.
Banks are now having to field relentless questions from investors, customers, regulators, and analysts about their AI strategy, where they’re making investments, how they’re determining ROI, and of course, the safeguarding measures they’re implementing.
It is a pivotal moment for the banking industry, one that necessitates real leadership. However, our research shows that only a quarter (24%) of banking CEOs are speaking publicly about their AI plans.
To break this down, over half (54%) of the world’s biggest banks have established AI as a strategic objective with investors, yet only one-quarter of their CEOs have ever mentioned it in their annual letter to shareholders. Over 400 AI-specific press releases have been issued by the banks in just the past two years, yet just 40% of CEOs have discussed AI in the media, with fewer still showing any willingness to discuss how it’s impacting their bank.
Clearly, this isn’t reflective of all banking CEOs. But for the most part, whichever direction you look in, there’s a disconnect between the banks’ overarching AI positioning and the CEOs’ commitment to telling their AI story.
This matters because whether that’s concern about the data security and privacy implications of using LLMs, or fears about how future AI regulation may impact the banks’ activities.
Crucially, those who understand AI’s potential can see that it changes everything – that successful AI adoption involves fundamentally reimagining what it means to be a bank.
Banking leaders who acknowledge this publicly and proactively share details of their ongoing organisational realignment to become an AI-first institution are providing much-needed reassurance that the bank is well-positioned in the race for AI supremacy. Whereas those who avoid the subject risk undermining the progress that is happening behind the scenes, or, worse, conveying the sense that the bank is pursuing a ‘wait and see’ strategy on AI.
It’s also a massive missed opportunity. We found that the banks which articulate their AI vision and leadership credentials most clearly are already seeing improved market performance, as investors naturally equate willingness to engage in the debate with the bank’s overall AI maturity.
Ultimately, AI poses an existential challenge for the banks, which is why it’s a mistake for CEOs to stay silent on the topic. The technology may currently suffer from over-hype and over-promising, but breakthroughs are being seen at a speed never before witnessed. The banks that are doubling down on investment in AI and hiring the best talent could soon accelerate their AI competency to such an extent that they can put their rivals out of business.
CEOs overwhelmingly set the banks’ agenda and drive outsized reach and engagement in everything they do – whether that’s winning customers, convincing new hires or reassuring investors.
All banks need to stay vocal about their use of AI – both to preserve and enhance their reputation and for the good of the wider industry, encouraging openness and transparency to ensure the AI race is a race to the top. Viewed in this light, it really is time the CEOs showed up to the debate.
Alexandra Mousavizadeh is CEO and co-founder of Evident, an independent AI benchmarking & intelligence platform that seeks to accelerate the successful adoption of AI in business.
