Those firms that have dipped their toes into artificial intelligence and blockchain technologies remain a significant minority of financial institutions, according to the results of a recent survey commissioned by industry consultancy Synechron.
Although a vast majority of the 92 executives polled and who are directly involved in technology decisions at their firms, agreed that both technologies will be “hugely important” for the industry in the next 10 years, only a small portion have examples of technologies in production.
Only 12% of the respondents claim to have an instance of a distributed ledger implemented within their organization while 3.5% of them have “actively deployed” artificial intelligence-based technology. However, 25% of those polled stated that they have actively use AI-based systems within their organizations.
Faisal Husain, Synechron
“I am unsurprised that a low percentage of institutions may have these technologies in active development, but the sheer potential of artificial intelligence and blockchain in the enterprise is tremendously real,” said Faisal Husain, CEO of Synechron.
Husain advised financial institutions not to delay embracing new technologies, even if the final return on investment is unknown.
“Apple Pay is a great example—banks went running towards this technology and invested massive budgets in implementing it,” he said. “Yet, Apple Pay never took off in a major way. Banks have spent a lot of money on technology advancements that have not yet borne fruit, and as such, are being careful about what technologies they adopt and where the ROI will come from.”
Of the two disruptive technologies, Wall Street appears to be far more comfortable with AI than blockchain. A quarter of the respondents stated that they had at least a small AI deployment and 34% of them are experimenting with it in their R&D departments.
The vast majority of those surveyed, 88%, stated that they were either researching ways to incorporate blockchain into their organizations or doing nothing at all with the technology. Many firms cited ‘unclear legal and regulatory aspects’ as their greatest concerns in adopting the new technology as well as scalability, performance and interoperability issues.
“Regulators may struggle to keep up with the scope of these technologies and their applications,” said Husain. “That being said, it is inevitable that regulators will be closely examining the security and transparency of technologies like distributed ledgers.”
Meanwhile, only a quarter of respondents said that they could not find a compelling use case for artificial intelligence. Moreover, slightly less, 24%, saw that lack of understanding the technology as a barrier to entry.
“Although many people might think about blockchain and artificial intelligence as ‘future’ technologies, the reality is this: these technologies are already in place at many leading financial institutions,” said Husain. “This is not a matter of if, but when and the when is now. Fintech is not going to tear down the system but make it more efficient.”
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