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Artificial Intelligence
AI maturity in financial services: lessons from the most successful firms
The race to harness artificial intelligence is reshaping the financial services landscape, with industry leaders demonstrating how strategic AI implementation drives competitive advantage. IMD’s AI Maturity Index reveals the winning formula.
In today’s rapidly evolving financial services sector, artificial intelligence (AI) has transformed from a buzzword into a business imperative. The most successful institutions are those that have systematically developed their AI capabilities across multiple dimensions, creating sustainable competitive advantages through technological innovation paired with organizational transformation. At IMD’s TONOMUS Global Center for Digital and AI Transformation, we’ve developed a comprehensive framework that evaluates organizations’ AI maturity across five key dimensions. Our proprietary AI Maturity Index provides invaluable insights into what separates AI leaders from followers, insights that are particularly relevant for financial institutions navigating this complex technological landscape. When we examine the 2024 AI Maturity Ranking with a focus on how financial institutions like Visa (#12), Barclays (#21), and JPMorgan Chase (#29) approach AI implementation, clear patterns emerge that offer a roadmap for organizations seeking to enhance their own AI maturity.
Leadership drives transformation
The journey toward AI maturity begins at the top. Financial services firms demonstrating advanced AI maturity share a common trait: unwavering executive commitment to AI as a strategic priority.
Visa exemplifies this approach, having integrated AI into its technology strategy for decades. Since 1993, the company has pioneered AI use in global payments, with significant investment backing this commitment. Their $3bn investment in AI and data infrastructure over the past decade demonstrates the scale of executive support necessary for AI leadership. This strategic investment continues with their October 2023 launch of a $100m fund for generative AI startups, further illustrating Visa’s commitment to staying at the forefront of AI technology.
JPMorgan Chase’s strategic focus on AI is evident across multiple facets of its business operations. Their concentrated investments reflect deliberate choices made at the highest levels of the organization to position AI as central to the firm’s competitive strategy.
Executive commitment manifests in concrete organizational structures. In November 2023, Visa launched its AI Advisory Practice as part of Visa Consulting & Analytics, creating a dedicated business unit focused on AI excellence. Such structural commitments provide the organizational foundation necessary for sustained AI innovation.
As we look to the future, gen AI's capacity to process vast amounts of data could significantly enhance our fraud models.- Don Hobson, Visa's Chief Information Officer
Platforms for success
The most AI-mature financial institutions recognize that excellence requires robust technological foundations. Cloud-based data platforms that provide seamless data access and manipulation underpin sophisticated AI solutions across these organizations.
Visa’s technical sophistication is demonstrated through the firm’s several hundred AI models in production. Their AI systems process approximately 300 billion transactions annually, analyzing over 500 different attributes for each transaction to generate real-time risk scores. These models power over 100 products, delivering real business value across the organization.
“As we look to the future, gen AI’s capacity to process vast amounts of data could significantly enhance our fraud models,” Don Hobson, Visa’s Chief Information Officer, has said.
Barclays has prioritized technological infrastructure, partnering with Microsoft to enhance its security strategy while addressing emerging AI risks and opportunities. The bank’s extended contract with HPE GreenLake to enhance its hybrid cloud strategy using AI and emerging technologies shows how the most AI-mature financial institutions build the technical foundations necessary for AI advancement.
Putting AI to work
Execution is everything. The most AI-mature financial institutions move beyond theoretical applications to integrate AI deeply into day-to-day operations. This operational dimension demonstrates how AI delivers tangible business value.
Visa has transformed payment security through AI, with their solutions preventing $40bn in fraud annually as of March 2024. Their launch of generative AI-powered fraud solutions like the Visa Account Attack Intelligence (VAAI) score demonstrates how AI enhances core business functions. These AI-driven fraud detection systems operate in real-time, safeguarding customers while simultaneously improving operational efficiency.
JPMorgan Chase exemplifies operational AI integration through their deployment of the large language model, or LLM Suite, a generative AI assistant enhancing productivity for over 60,000 employees across the bank. This broad deployment shows how AI can transform internal operations at scale. Their IndexGPT tool, which uses OpenAI’s GPT-4 to create investment baskets based on trends, demonstrates AI’s application to core financial services functions.
Barclays utilizes AI across multiple operational areas, from fraud detection to algorithmic trading optimization. Their AI-powered chatbots and virtual assistants improve customer service delivery while freeing human agents to handle more complex issues – a classic example of AI augmenting rather than replacing human capabilities.
The bank’s team of 2,000 AI experts provides the specialized talent necessary for advanced implementations.
Humans in the loop
The AI leaders in financial services recognize that technological transformation requires corresponding human capability development. Strategic investments in workforce skills development distinguish the most mature organizations.
JPMorgan Chase stands out in this dimension, leading global AI hiring in banking with 400 job offers in Q1 2024 alone. The bank’s team of 2,000 AI experts provides the specialized talent necessary for advanced implementations.
Beyond hiring, they’ve prioritized upskilling, providing AI training for new employees and developing specific skills like prompt engineering through apprenticeship programs. Their commitment to upskilling over 60,000 employees demonstrates the scale of workforce development required for AI transformation.
This focus on workforce development creates a virtuous cycle: as employees develop AI capabilities, they identify new applications and opportunities, driving further adoption and innovation. The most mature organizations create cultures that embrace AI as an enabler rather than a threat, positioning technological change as an opportunity for professional growth.
Rather than limiting AI development to internal teams, leaders create strategic partnerships that accelerate capability development.
The partnership advantage
A distinguishing characteristic of AI-mature financial institutions is their development of innovation ecosystems that extend beyond organizational boundaries. Rather than limiting AI development to internal teams, leaders create strategic partnerships that accelerate capability development.
Barclays’ investment in Israeli AI startup Velotix to enhance automated data security and compliance solutions exemplifies this ecosystem approach. By strategically participating in the innovation economy, mature organizations gain early access to emerging technologies while sharing development costs and risks.
Visa’s partnerships with The Data Appeal Company to enhance tourism through AI-driven visitor spending insights and with Analytics Partners to improve retailers’ marketing strategies demonstrate how financial institutions can extend AI capabilities throughout their business ecosystems.
This ecosystem perspective recognizes that AI maturity develops faster in collaborative environments than in isolation – a principle that distinguishes leaders from followers in the rapidly evolving AI landscape.
The ethical imperative
Trust is non-negotiable. As AI becomes increasingly central to financial operations, leading institutions recognize the importance of robust governance frameworks to ensure responsible deployment.
JPMorgan Chase has established an Explainable AI Center of Excellence focused on ensuring fairness, transparency, and accountability in AI systems. Their collaboration with academic institutions like the Massachusetts Institute of Technology to advance socially responsible AI demonstrates the bank’s commitment to ethical considerations beyond regulatory compliance.
Barclays emphasizes ethical AI adoption through its partnership with the Open Data Institute (ODI). By adopting the Data Ethics Canvas and incorporating their own Data Principles, they ensure transparency and fairness in AI projects. This structured approach to ethics creates the foundation for responsible innovation.
Visa approaches ethical AI through cross-functional collaboration, bringing together teams from legal, risk, policy, social impact, and diversity and inclusion departments to focus particularly on bias mitigation and fairness in AI. Their partnerships with Stanford University on ethical technology dilemmas and participation in the Microsoft National AI Council demonstrate their commitment to collaborative approaches to responsible AI development.
The future of finance belongs to those who master not just AI technology, but the organizational maturity to deploy it effectively.
What’s your roadmap to AI maturity?
The financial services industry offers a compelling case study of how the systematic development of AI capabilities creates sustainable competitive advantages. Organizations that excel across the five dimensions of AI maturity consistently outperform peers in key metrics.
For financial institutions seeking to enhance their own AI maturity, the examples set by industry leaders offer valuable lessons:
- Start with clear executive commitment, manifested through dedicated organizational structures and substantial investment.
- Build robust technological foundations, prioritizing cloud infrastructure and data access.
- Focus on operational integration that delivers tangible business value, particularly in core functions like fraud detection and customer service.
- Invest systematically in workforce development, creating a culture that embraces AI innovation.
- Establish comprehensive ethical frameworks that enable responsible innovation.
The financial institutions that will thrive in the coming decade will be those that systematically develop their AI capabilities across all five dimensions. As the AI Maturity Index demonstrates, this comprehensive approach to AI transformation creates resilient organizations capable of leveraging technology to deliver exceptional customer value while managing evolving risks. The future of finance belongs to those who master not just AI technology, but the organizational maturity to deploy it effectively.
IMD’s TONOMUS Global Center for Digital and AI Transformation provides proprietary analysis and executive education focused on helping organizations enhance their digital and AI maturity. To discover more about the AI Maturity Index methodology or to assess your organization’s current capabilities, visit our information page here.
All views expressed herein are those of the author and have been specifically developed and published in accordance with the principles of academic freedom. As such, such views are not necessarily held or endorsed by TONOMUS or its affiliates.
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