Fifty One Degrees’ Research Sheds Light on Generative AI’s Revolutionary Role in Financial Sector

A groundbreaking study conducted by Fifty One Degrees has disclosed that a substantial 84.6% of functions within the realms of banking, insurance, and FinTech stand to gain from the adoption of AI technology, potentially catalyzing an additional £41.7bn in economic output for the industry.

  • 8 in 10 tasks will be made more efficient by deploying AI, whereas just over half of tasks will be higher quality where AI is used.
  • GenerativeAI (GenAI) is the most powerful AI technology for financial services, and GenAI Assistants would benefit 74.9% of tasks.
  • The greatest efficiency gains will be for internally focused tasks and processes, as opposed to customer-facing tasks, with an efficiency gain of 41% for internal tasks, and 34% for customer-facing. 
  • GenAI is expected to increase economic output in financial services by up to 15%, resulting in an additional £41.7bn of additional output from the sector.

Insights from Fifty One Degrees:

On 19th March 2024, AI consultant firm entity Fifty One Degrees announced findings from an research study, evidencing the significant advantages of generative AI technology across financial services entities.

This in-depth analysis covered 311 tasks spanning fourteen different functional areas within the financial sector, exploring the suitability and potential advantages of AI technologies for each task.

GenAI’s Significant Influence in Financial Services

The findings reveal that GenAI Assistants, specifically designed to assist employees in various functional areas, could positively influence three-quarters of tasks in financial and insurance firms. These assistants are adeptly trained on distinct organizational protocols and regulations, proving particularly beneficial in functions that handle vast amounts of natural language information, such as Compliance and Legal, potentially leading to substantial workflow enhancements or complete automation.

Furthermore, the study identifies other AI tools, driven by Generative AI and Large Language Models, as significantly beneficial, affecting 39% of activities. These tools encompass a variety of AI-enabled applications, including training solutions and legal aids.

Extensive Benefits and Economic Outcomes

The analysis indicates that departments like Analytics, Technology, Customer Services, and Underwriting could significantly boost both efficiency and the quality of output through GenAI usage. Although functions such as Compliance and Legal are likely to witness notable efficiency boosts, the improvement in the quality of work might not mirror this trend.

The introduction of GenAI in the banking and financial services realm is poised to have a profound economic impact, with the potential to enhance the sector’s economic output by 15%, thereby contributing an additional £41.7bn to the industry’s value.

Perspectives from Fifty One Degrees’ Executive

Recent research estimates that Generative AI will drive $2.6 trillion to $4.4 trillion annually in value for global companies. Within Financial Services and Insurance, that figure is $200 billion to $340 billion, which is equivalent to 9 to 15 per cent of operating profits.  The UK financial services and insurance industries produce £278bn of economic output. A 15% boost would generate a staggering £41.7bn of additional economic output. Further, the UK financial services industry equates to 8.3% 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.
Commenting on the study, co-founder and CEO of Fifty One Degrees, Nick Harding said “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.”