SA financial services execs look to AI for real-time insights

Many believe that artificial intelligence (AI) is set to transform financial services organizations, but most South African financial services companies are behind the curve or are using old data to drive business insights which is inhibiting their potential.

That's a key insight in a new research report from software company ActiveOps titled "Ready or not AI is here," which revealed that although 98% of SA's financial services leaders believe harnessing the power of AI will help them make better decisions, the state of their data is hindering decision-making.

"South African operations leaders have painted a bleak picture of their day-to-day reality and are lagging behind. Critical decisions are being made based on insights from data that is three months old, while 97% find that it takes significant effort to access those insights in the first place," the report's authors said.

ActiveOps commissioned Censuswide to survey over 850 chief operating officers, chief financial officers and senior heads of operations within the financial services sector to gather insights on their priorities for 2024, challenges they were experiencing with their operational data and adoption of AI.

The research was conducted in seven countries: South Africa, the UK, the Republic of Ireland, the US, Canada, Australia and New Zealand.

Months-old data is inhibiting potential

Researchers found the surveyed leaders were now recognizing the shortfalls of not having access to the data they need to see the significant benefits that AI can bring.

In South Africa, two-thirds of companies surveyed were using data that is older than one month, with 47% using data over three months old.

About 40% of execs said they can't access data to make real-time decisions and half said they have too much data, while one-third don't trust their data. Around 65% of SA execs said they lack confidence that they will meet their 2024 priorities.

"Data is in a poor state, and assumption is king. This is hindering decision-making, and the challenges are significant. However, there is a strong belief that getting data in order and introducing AI at an advanced level will have positive impacts across businesses," the white paper said.

The majority of those surveyed believe operational performance, cost control and customer experience will be bolstered by AI, but 67% of execs in South Africa said they are just starting out on their AI adoption journey.

One of the primary concerns for businesses is job displacement, and in South Africa this was a concern for 65% of business leaders.

ActiveOps said it is critical that challenges are overcome – such as the lack of data skills, inconsistent use of terms or metrics across a business, and a lack of support from other departments – so that potential can be unlocked.

In South Africa, 47% of companies surveyed were using data that was over three months old and 40% of execs said they can't access data to make real-time decisions. (Source: DC Studio on Freepik)

Kuljit Bawa, ActiveOps MD for Europe, the Middle East, India and Africa (EMEIA), said that despite the current challenges facing financial services organizations, it is positive to see a growing demand for AI and optimism about its potential positive impact for the sector.

"The majority of leaders are aware of the advantages that AI can bring, especially when it comes to managing and overseeing large scale operations, and that really is half the battle," he said.

"Our research makes it crystal clear that belief in its potential aren't the inhibitors to AI adoption. In fact, this is what will propel it into tech stacks across South Africa and unleash the power of real time data," Bawa added.

There are, however, reasons to feel optimistic about the direction that financial services organizations are taking when it comes to AI adoption.

Over half of operations leaders in South Africa believe AI will give them greater control over cybersecurity, while 37% believe it will automate more tasks to increase efficiency.

In a year's time, half want AI to tell them what they should do based on predictive insights, suggesting a promising shift in the levels of trust in AI.

"There are high hopes for the value that AI can bring to businesses. Not only in the impact that it will have, but what operations leaders want AI to give them, such as providing suggested actions, predictions that will offer direction for decision making and insights into the current state of play within their department and beyond," Bawa concluded.

— The Staff, Connecting Africa