GenAI in Financial Services: A look back to look forward
‘May you live in interesting times’ is certainly one way of describing the current developments around GenAI. Every week brings a host of new announcements across products, players and partnerships, making it really tough to make sense of it all. What can we learn from GenAI digital transformation at financial services and insurance (FSI) firms in the last 18 months, and how can that inform actions for the near term?
Look Back
A look back is useful to separate hype and predictions from the reality of actual adoption. At Kainos we worked with FSI clients and partners across the solution lifecycle from business cases, MVPs to full GenAI enterprise scaling.
Our experience revealed key leadership characteristics that help to secure the route to real value. Foremost is the need to ‘do something’ and this could range from GenAI policy definition at one end, to full GenAI solution scaling. At a minimum, doing something provides valuable learning, understanding of capabilities and constraints, engagement of partner ecosystems and solution options.
For the look back we considered our FSI GenAI use case deployments across contact agent support, claims, equities research and fraud. When it comes to GenAI we learned that leaders:
- Visibly govern and communicate the organisation’s stance on GenAI focusing on productivity realisation whilst maintaining compliance
- View learning as a high value outcome for future readiness
- Manage the key building blocks of people, data, skills, partners and models holistically
- Understand the key risks and implement mitigating controls
- Encourage employee participation and education through controlled, proactive initiatives. There is a real concern that discouraging employees can result in uncontrolled experimentation and increased data security risks.
- Prioritise high transaction/high cost, scalable use cases for productivity and efficiency benefits. From our recent FSI roundtable, leading clients are prioritising high impact, low risk use cases as a starting point.
- Build human in the loop for control and assurance
GenAI may be a novel technology with vast potential, but the role of leadership remains critical for managing the change opportunity i.e. set the vision, communicate, and enable the right priorities and building blocks.
Look Forward
The good news is that there are routes to GenAI value through the above proven leadership characteristics, however the bad news is that the pace of GenAI product innovation is quickening. In essence, the current state of GenAI is only the end of the beginning and the second wave of GenAI is starting to introduce new features over the next 18 months.
Foundational model providers understand that FSI clients are seeking improvements and are now working to deliver these in their next generation models i.e.
- Enable a wider set of use cases and benefit e.g. front, middle, back office
- Take on the completion of end-to-end tasks and goals e.g. GenAI having agency across workflows
- Allow flexible, secure GenAI use on device or cloud e.g. personal assistants
- Reduce hallucinations, increase auditability e.g. use accurate and approved data for transparency
- Embed GenAI into employee work tools and software
- Provide full multi-modal, multi-language and real-time capabilities e.g. voice-bots, video translation
Some of these features are already being rolled out, whilst others are priority items on the product roadmaps of foundational model providers.
Therefore, enterprise and personal GenAI footprints will increase and thus be embedded into work practices. A ‘do nothing’ option will no longer be viable even if it was desirable. This will increase the need for planned and controlled adoption to maximise organisational benefits whilst minimising risks.
Look Strategically
The current environment of rapid GenAI product development, embedded automation and continuous innovation calls for a strategic mindset. The alternative of reacting to foundation model developments or constantly pivoting, is not sustainable for the organisation, people or customers.
As we move towards the second wave there is an opportunity for all FSI leaders to ready themselves and the organisation. From our look back and look forward, we identified key principles to target real business outcomes and tangible benefits. Our practical advice for FSI leaders and organisations is captured within these 7 principles:
1. Govern and communicate a vision
2. Be proactive but business driven
3. Start small, think big and do something
4. Treat learning as a product
5. Manage data sources and adopt a safety-first culture
6. Build human into the loop
7. Think capability, use cases and skilled partners
If you would like to learn more about our GenAI work and approaches, please contact [email protected] or click here to download our whitepaper ‘Generative AI in FSI.’
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