Almost 85 per cent of tasks and activities in financial services firms would benefit from generative AI technology, according to a new research study by Fifty One Degrees, a London-based AI consultancy.

Generative AI assistants built to support team members with one or more specific functions will benefit over three-quarters of tasks performed by financial services and insurance firms, Fifty One Degrees has revealed.

The AI consultancy analysed 311 tasks and activities spanning 14 functions in banks, insurance companies and financial services firms, and considered which AI technologies would benefit each task and an expectation of how much benefit would be created.

Generative AI assistants are trained on specific policies, procedures and regulations. They are most impactful for functions where large volumes of natural language information are processed, such as compliance, legal, risk management and underwriting. In some cases, AI assistants will make employees more efficient, whereas in other places they will automate some of the workflows altogether.

Nick Harding, co-founder and CEO of Fifty One Degrees, commented: “The UK financial services industry is a powerhouse that fuels the local economy by servicing consumers and businesses, but is also the UK’s biggest export.

“Enabling this industry, which is so critical to our collective success, to remain at the forefront of technology is something we’re passionate about. Assertively adopting generative AI will enable UK financial services to grow further, enabling this vital sector to remain a global leader.

“And this is just the beginning. This study represents the generative AI technology and tools that are available today. What we’ve experienced is rapid development and evolution of the technology and its capabilities, meaning the opportunity for businesses to benefit will only increase.”

Generative AI boosting economic output

The firm’s analysis shows that analytics and data science, technology, customer services and underwriting functions can both increase efficiency and the quality of work delivered through the use of generative AI. Other functions such as compliance, enterprise risk and legal will benefit significantly from efficiency gains, but the quality of work is unlikely to increase at the same rate.

Recent research estimates that generative AI will drive $2.6trillion to $4.4trillion annually in value for global companies. Within financial services and insurance, that figure is $200billion to $340billion – equivalent to nine to 15 per cent of operating profits. The UK financial services and insurance industries produce £278billion of economic output.

A 15 per cent boost would generate a staggering £41.7billion of additional economic output. Further, the UK financial services industry equates to 8.3 per cent of the entire UK economy and 2.5 million people are employed in the sector. Therefore, any gains made by financial institutions would have far-reaching impacts across the wider UK economy.

Web3 products and services could benefit from the streamlined user experiences that have been mastered by Web2, according to several industry builders who attended Next Block Expo in Berlin.

Speaking to Cointelegraph at the event, Web3Auth senior cryptography engineer Matthias Geihs said Web3 services continue to be hamstrung by clunky login features and the associated responsibility and technicality of wallet and private key management.

During his presentation, Geihs cited data that suggests 20% of Bitcoin lost by users is a result of poor wallet management. At the same time, many Web3 services suffer significant drop-off rates of potential users at the sign-up stage on their websites and platforms.

Web3Auth is one of a handful of platforms that aims to streamline Web3 onboarding by using multi-party computation (MPC) to provide passwordless authentication for wallets. A key part of its offering is enabling noncustodial wallet infrastructure for users.

The service already has several high-profile enterprises and decentralized applications onboard, including Web3 players like Animoca Brands, Binance and SkyMavis and mainstream companies such as McDonalds, Ubisoft, Universal and Fox.com.

Related: Animoca’s Yat Siu bullish on TON partnership as Bitcoin sets strong foundation for 2024

Central to its offering is the ability for users to login with Web2 credentials from Google, Facebook, Twitter and Discord accounts. Its services go far deeper and are intended to cater to both Web2 faithful and Web3 power users.

The service uses a distributed key generation protocol, which sees several servers work together to generate a set of “key shares.” As Geihs stresses, the key “never exists in one place”:

“The output of the protocol will be that each of the servers hold the key share. But none of the servers ever learned the full key. Nobody actually knows the real private key.”

Web3Auth’s infrastructure then maps the distributed keys to a user’s identity using the chosen login Web2 account or Web3 wallet.

“So you can login with Google, and that signature proves you are the correct person to our servers. They then give you the key shares or let you run signing protocols. The Web2 login signature is the way to access the keys that are uniquely mapped to your identity,” Geihs adds.

The solution is one example of how Web2 and Web3 functionality combine to create a seamless user experience. Essentially, a user is unaware of the cryptographic methods enabling them to use a Web3 wallet which is tied to their conventional, Web2 login method of choice.

Fernando Martinho, CEO and co-founder of decentralized, privacy communications infrastructure firm Relayz, highlighted the need to simplify Web3 services.

“In development, there is a basic rule: there should be three clicks and you’re logged in,” Martinho says. “Logins need to abstract away from complicated steps.”

Prominent speakers at the event also weighed in on macro conditions driving up Bitcoin’s price into 2024 at NBX Berlin. Bitcoin’s mining reward halving, the potential approval of Bitcoin spot exchange-traded funds and recent regulatory enforcements on industry heavyweights like Binance were cited as major catalysts for BTC’s uptick as 2023 draws to a close. 

Magazine: Real AI use cases in crypto: Crypto-based AI markets, and AI financial analysis