Highlights from the 2024 EY European Financial Services AI Survey

Most European financial services providers have some degree of AI implementation – but must improve training and regulatory readiness.

In brief

• The vast majority (90%) of European financial services executives surveyed by EY in October 2024 have integrated AI into their operations to some extent.
• Willingness to invest in GenAI is high, with 67% of Swiss and 72% (overall) of European executives planning to increase spending over the next year.
• Key challenges include ensuring adequate training, managing regulatory challenges and considering ethical aspects of AI.

Artificial intelligence (AI) is high on the agenda at financial services organizations in Europe – but there’s still a long way to go. While the majority (Switzerland: 92%, Europe: 90%) of European financial services executives surveyed by EY in October 2024 have integrated AI into their operations, most are still in the early stages. A significant minority (8%) of those polled had not yet integrated AI at all.

Implementing generative AI (GenAI) remains a key priority for European finance organizations, with 67% of Swiss and 72% (overall) of European executives planning to increase their spend over the next six to 12 months.  

To realize the promise of AI and GenAI and successfully increase productivity and efficiency, organizations must remain focused on talent and skills. Challenges include managing regulatory and other risks, and considering ethics appropriately. In this article, we explore highlights from the EY European Financial Services AI Survey and what they mean for Swiss and European financial sector.

Participants were also asked about the most important qualities their companies look for when recruiting young talent for an AI-supported workforce. Interestingly, the focus on technical expertise has slipped down the priority list this year, cited by 38% of Swiss executives and 34% overall. Instead, these attributes stood out as most important to Swiss survey participants:

• Adaptability and flexibility (83%)
• An innovative and experimental mindset (63%)
• Ability to collaborate and work in new areas (54%).

Given the sweeping changes expected, readiness to upskill is lagging. Although 75% of Swiss respondents (78% in Europe overall) recognize that the workforce has limited to no experience with the latest GenAI technologies, only a quarter (25%) of companies in Europe – and just 17% in Switzerland – already run a training program. While it’s encouraging to note that almost half (46%) of Swiss participants are in the initial planning phase, 13% of Swiss executives admitted that they have no plans to develop training at present.

Risk readiness

The main challenge around AI risk in 2024 remains the same as last year: a limited understanding and lack of experience with GenAI applications and their impact on the workforce (cited by 58% in Switzerland, 56% in Europe overall. 

In second place, reported by 33% in Switzerland and 38% in Europe overall, was uncertainty about existing and upcoming regulatory implications. Almost half (46%) of Swiss financial institutions see high potential for AI applications in the area of legal risk and compliance, yet only 8% (11% in Europe overall) say their company is prepared for new and upcoming AI regulations such as the EU AI Act, which entered into force on 1 August 2024. Many more are partially ready (71% in Switzerland and 70% in Europe overall). Over a fifth (21%) of respondents from Switzerland and 15% from Europe do not yet even have a framework for assessing regulatory AI risks.

In joint second place in Switzerland (33%) were also implementation costs, control framework requirements and the modernization of old systems.

In third place for all respondents was the speed of development of GenAI compared to their own pace of integrating technology into the company (25% in Switzerland, 35% in Europe overall).

Ethics

In the context of GenAI, executives continue to see ethical issues as a critical point. A primary concern was quality – cited by 56% (CH: 63%) – followed by transparency and traceability (54% in Switzerland and overall); the potential for discrimination, bias and unfairness (50% in Switzerland, 47% overall); and data protection (42% in Switzerland, 53% overall).

Given the high level of awareness for ethical issues, it is surprising that just 8% of Swiss respondents (14% in Europe overall) say they have already implemented a comprehensive AI ethics policy, while a further 25% (31% in Europe overall) are in the early stages of developing one. Over a third (38%) of Swiss and almost a quarter of European (24%) executives note that there were no plans to do so.

It appears that many banks, insurers and asset managers in Switzerland still have a long way to go to reach the next level of AI capability. Raising the bar on regulatory preparedness will be key to enabling successful integration with a lasting positive impact.