Over nine in 10 (97 per cent) financial services and insurance (FSI) organisations believe generative AI will have a big impact on their success in the next three years according to research from Hakkoda, the cloud data engineering consultancy specialising in Snowflake.
The research, titled 2024 Financial Services & Insurance State of Data Report surveyed 145 directors to CEO-level data leaders from large FSIs.
Impact of AI
The extent AI will have on organisations was further explored as 81 per cent of respondents were confident that their data teams could build AI capabilities and infrastructure needed to support AI workloads. Eighty-four per cent already felt like their teams have the AI skills and expertise for successful implementation.
Furthermore, 51 per cent of FSI leaders report that their company is using generative AI for documentation and metadata descriptions. Compared to other industries, they are less likely to be using generative AI tools for data governance and compliance (43 per cent), data cleaning (43 per cent), data cataloguing (41 per cent), schema matching (38 per cent) and AI copilots (31 per cent).
However, only 26 per cent of FSI organisations have defined generative AI use cases they are ready to implement. Critically, just 30 per cent of surveyed FSI organisations have modernised their data stack.
Looking to the cloud
Other Financial Services State of Data 2024 report findings:
- Seventy per cent of FSI organisations have yet to centralise their data on a primary cloud data platform.
- Seventy-four per cent of FSI organisations intend to centralise in the cloud in 2024.
- Thirty-eight per cent of FSI organisations cite data monetisation as a major challenge.
- Fifty-three per cent of FSI organisations are outsourcing their data management.
“The State of Data 2024 report shows that financial services organisations are eager to modernise their data stacks, implement generative AI, and tap into data monetisation,” said Anand Pandya, global head of financial services at Hakkoda.
“FSI data leaders know they need help from modern data experts who understand their industry to achieve their data goals. Furthermore, capturing the opportunities presented by powerful new data-driven technologies requires rapid execution along a long-term roadmap to show that tomorrow’s capabilities are ready today.”
Expiring data infrastructure
Financial services leaders report 136 per cent ROI on their data investments and greater organisational data literacy than other industries, but their data infrastructure tends to lag behind other data-driven industries. Their data stacks are reportedly less scalable and efficient than other sectors surveyed. Only eight per cent of FSI leaders reported their data stores and pathways are ‘extremely efficient and scalable’.
Only 30 per cent of financial services and insurance organisations have centralised their data on a cloud platform. The FSI sector is also less likely to use data lakes. According to the research, only 37 per cent of FSI leaders reported that their business had one in current use. Additionally, among director to senior director-level FSI data leaders, 58 per cent saw building and maintaining advanced analytics capabilities as a major challenge for their operations in 2024.
Twenty-two per cent of FSI organisations are currently monetising their data. Ninety-three per cent are planning to monetise within the next two years. Data monetisation was reported as a major challenge by 38 per cent of FSI leaders (trailing only Healthcare among industries surveyed). FSI organisations report low confidence in the efficiency and scalability of their data stacks. In fact, 70 per cent of FSI organisations had yet to centralise their data on a primary cloud platform in 2023.
Francis Bignell
