Article by Nisha Ramchandani from The Business Times | 24 August 2021
Seventy-five percent of financial services companies would value clearer regulation and standards on the use of artificial intelligence (AI), said a report on AI ethics and governance issued by Temasek.
While various AI ethics and governance guidelines exist, just 50 percent of organizations are familiar with such guidelines, suggesting there is room for improvement.
Global spending on AI is expected to hit US$110 billion by 2024, according to estimates by the International Data Corporation, with financial services singled out as among the biggest spenders. AI solutions are seen as beneficial for the world’s banks and insurance firms, with a McKinsey study estimating that tapping such solutions could tack on an additional US$2 trillion of annual value.
In compiling the report, Temasek conducted a survey with 39 decision markets from the United States, Europe, Singapore and Hong Kong in March this year, focusing on AI adoption and governance among banks and insurance firms. Industry experts were also polled on how AI ethics and governance could speed up the use of transformative AI solutions in financial services.
The report also showed that trust ranks high on the agenda. The vast majority, or 93 percent, of firms want AI solutions that are trustworthy.
While companies in financial services use AI in their processes in some form or another, not all firms make use of AI to the same degree. Only 13 per cent fall into the category of “AI leaders”, or companies which are effectively using responsible AI in most of their processes to create value, the report highlighted.
Financial services is a major sector for Temasek, comprising nearly a quarter of its S$381 billion net portfolio value as at March 31, 2021. “As a generational investor, Temasek is building AI capabilities to not only drive better business outcomes in our ecosystem but also shape a better world,” it said in the report. “To do so, AI solutions have to be responsibly designed, developed, and deployed.”
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