Financial service providers holding back on bringing in AI due to lack of expertise and low regulatory preparation

Read in German, read in French

• Most managers surveyed (90% in Europe, 92% in Switzerland) have integrated AI into their operating processes, but are generally still at an early stage. Roughly one in ten Swiss or European company surveyed (8%) have not integrated AI at all.
• More than two-thirds of managers (72% in Europe, 67% in Switzerland) are planning to increase their annual investment in GenAI.
• Only around one in ten managers (11% in Europe, 8% in Switzerland) say their company is prepared for forthcoming regulations, including the EU AI Act.
• Most managers (78% in Europe, 75% in Switzerland) believe their workforce does not have sufficient skills to implement GenAI applications.

Zurich, December 19, 2024 - Managers in the European financial services sector have already integrated artificial intelligence (AI) and generative artificial intelligence (GenAI) into their operating processes, so far mainly looking to boost productivity and efficiency. This is the finding of a survey on AI in the European financial sector conducted by auditing and consulting firm EY. However, only 9% of those surveyed in Europe think they are leaders in the field (13% in Switzerland). Although managers have high ambitions for making greater use of AI to support their business and 28% say they stepped up the introduction of AI overall last year (21% in Switzerland), most companies are still in the early, experimental phase, especially as far as GenAI is concerned.

The new survey data, reflecting the opinions of managers at over 100 European financial services companies, some 20 of them in Switzerland, with a total market capitalization of around EUR 880 billion, indicate that only 31% of companies believe they are on track with integrating AI (30% in Switzerland). Only 11% of managers say their company is ready for the forthcoming AI regulations (8% in Switzerland). Even though 78% of those surveyed acknowledge that their workforce has only limited experience, if any, with the latest AI technologies (75% in Switzerland), only 25% have set up new training and further development programs (17% in Switzerland). 60% are still in the planning phase (63% in Switzerland).

Roger Spichiger, AI Leader Financial Services at EY Switzerland, says of the survey: “Generative AI remains a key item on the to-do list for managers in the financial services sector; in the medium term, it promises both productivity gains and the ability to tap into new growth potential. There is virtually no doubt that the use of AI (and increasingly GenAI) is pioneering. But implementing, and particularly scaling up, a rapidly developing technology is complex and challenging, not least due to limited risk appetite and a shortage of in-house expertise. Some companies have made major progress in introducing AI and are seeing real benefits, but many are still struggling to keep up.”

AI could affect up to one-third of jobs in the financial sector in Europe

Most managers surveyed (66% in Europe, 79% in Switzerland) believe that one-quarter of current jobs in the European financial services sector could be impacted by the advancing integration of AI over the coming year. 93% of managers (100% in Switzerland) say 10% of positions could go. Even so, no more than one-quarter of companies surveyed (25% in Europe, 17% in Switzerland) have established a training program. 43% are still in the initial phase of the planning (46% in Switzerland), and 29% confirm they currently have no training programs (38% in Switzerland). 

Entry-level positions may be particularly affected: 59% of managers think AI technologies will have a significant or even transformational impact on the tasks and roles performed by new employees (63% in Switzerland). Despite this view, only 24% of managers are planning to revamp entry-level positions and the responsibilities these have (13% in Switzerland), and only 25% intend to integrate AI training into their graduate programs (17% in Switzerland). 35% of those surveyed say they have not yet taken any action to make up for the potential impact of integrating AI on the young workforce (25% in Switzerland).

Sectors that need AI and need investment

The sector with the strongest demand for AI talent is data science and innovation (54% in Europe and 63% in Switzerland). In second place among those surveyed in Europe is back-office operations (46%), followed by information technology (40%). In Switzerland, information technology ranks second with 54%, followed by legal risk and compliance with 46%.

Asked to name the most important characteristics companies look for when recruiting the next generation of managers for an AI-supported workforce, the following three attributes emerge most frequently in the European and Swiss financial services sector: adaptability (77% in Europe, 83% in Switzerland), innovative and experimental thinking (70% in Europe, 63% in Switzerland), and the ability to work with others and work outside one’s own area (44% in Europe, 54% in Switzerland). This year, technical know-how no longer ranks among the top priorities (34% in Europe, 38% in Switzerland).

The survey data also confirm that investments in GenAI remain key for European financial companies: 72% of managers plan to increase expenditure in the next six to 12 months (67% in Switzerland). 

The biggest challenges: GenAI expertise and future regulation

When it comes to GenAI, managers’ biggest concerns about integrating the technology are the same as last year: European financial leaders regard limited understanding and lack of experience with GenAI applications and the impact these will have on the workforce as the biggest challenge (56% in Europe, 58% in Switzerland). In second place with 38% (33% in Switzerland) is uncertainty about the impact of existing and future regulations. In Switzerland, second place at 33% each is shared by implementation costs, control framework requirements and modernization of old systems. In third place among all those surveyed was the speed at which GenAI is developing compared to their own pace in integrating technology into the company (35% in Europe, 25% in Switzerland).

In terms of the broader AI landscape, only 11% of managers said their company was fully prepared for future regulations (8% in Switzerland). 70% say their company is ready only partially or to a limited extent (71% in Switzerland).

The importance of ethics when integrating GenAI

Managers continue to express concern about ethical issues in connection with GenAI. The main worry mentioned in 2024 about bringing in AI was the quality of results (56% in Europe, 63% in Switzerland), followed by transparency and traceability (54% in both Europe and Switzerland); data protection ranked fourth (53% in Europe and 42% in Switzerland), then came the potential risk of discrimination, prejudice and a lack of fairness (47% in Europe). This latter issue ranked third in Switzerland with 50%.

To deal with potential ethical implications of integrating GenAI, 14% of managers surveyed stated that they have already put comprehensive AI ethics regulations in place (8% in Switzerland); a further 31% (25% in Switzerland) are in the initial stage of development. No more than one-quarter of those surveyed (25% in Europe, 17% in Switzerland) said their company did not have any AI ethics rules yet but was going to introduce them, and 24% have no plans (38% in Switzerland).

Conclusion on the survey in the context of most recent regulatory developments

In contrast to the EU, to date, there is no AI-specific legislation in Switzerland. However, on 18 December 2024, in their latest guidance on "Governance and risk management when using artificial intelligence" (08/24), FINMA also expressed their expectation, that companies using AI should actively consider the impact on their risk profile and to align their governance, risk management and control systems accordingly. One aspect, FINMA highlighted in particular, was the clear distinction between development and independent review of AI applications.

Roger Spichiger of EY Switzerland concludes: “Now is the time, also in view of the latest FINMA guidance, to focus in particular on attaching sufficient importance to building up the AI capabilities that will be necessary in the future. What is needed is a solid foundation of risk management and governance, which at the same leaves enough room for testing new and partly unknown things, gain valuable experience and build up the necessary expertise in the medium-term. It is vital that companies are not complacent, mainly protecting the current state, but instead get actively involved in AI and GenAI now.”

For more information, please contact daniele.mueller@ch.ey.com.

About the global EY organization

The global EY organization is a leader in assurance, tax, transaction and advisory services. We leverage our experience, knowledge and services to help build trust and confidence in the capital markets and in economies all over the world. We are ideally equipped for this task — with well trained employees, strong teams, excellent services and outstanding client relations. Our global purpose is to drive progress and make a difference by building a better working world — for our people, for our clients and for our communities.

The global EY organization refers to all member firms of Ernst & Young Global Limited (EYG). Each EYG member firm is a separate legal entity and has no liability for another such entity’s acts or omissions. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. For more information about our organization, please visit ey.com.

EY’s organization is represented in Switzerland by Ernst & Young Ltd, Basel, with 10 offices across Switzerland, and in Liechtenstein by Ernst & Young AG, Vaduz. In this publication, “EY” and “we” refer to Ernst & Young Ltd, Basel, a member firm of Ernst & Young Global Limited.

About the survey

The EY European Financial Services AI survey was carried out in October 2024 and gauged the opinions of 166 managers in the financial services sector across Europe at 106 private and listed companies with an aggregate market capitalization of almost EUR 880 billion. 24 managers were questioned in Switzerland. The aim was to assess the potential impact of integrating AI and generative AI (GenAI) on productivity, talent, skills, capital allocation and risk management.