People and businesses around the world create a staggering
1,145 trillion megabytes of data per day. Data is transforming all our lives, from accelerating the diagnosis of diseases to optimising retail pricing.
Data fuels AI technologies and AI can only be as good as the information which it harnesses.
According to PwC, AI has the potential to contribute $15.7 trillion to the global economy by 2030 and could boost the GDP by up to 26% in local economies in the same time frame. Further to this,
McKinsey forecasts that AI could deliver a 22% boost to the UK economy by 2030. AI has immense potential to be a significant contributor to future UK economic growth.
financial services sector contributed £173.6 billion to the UK economy in 2021 and the sector is the fourth largest out of the OECD economies. The forecasted increase in AI spending combined with the size of the UK’s financial services industry represents
an immense opportunity to turbocharge innovation and growth for the better. This blog will discuss how organisations can maximise the AI opportunity by getting their data practices right.
Waste not, want not
Both globally and in the UK, we produce a staggering amount of data each day, but
the majority of that is actually wasted (68%). There are two main reasons why data is not used. The first is due to regulation. Within the finance industry, some data is not allowed to be used to its’ classifications and also for regulatory/governance reasons.
GDPR legislation for example doesn’t allow personal data to be kept for longer than it is needed, so it then must be disposed of.
The second reason is down to a lack of understanding. Many banks don’t know what data they have or lack an understanding of the types of data that they have. This knowledge gap is holding back digital transformation in many businesses who are data rich but
are also information poor.
In many cases data is being handled without the accuracy and speed which a better understanding of data makes possible. The AI opportunity is simply going to be missed if people fail to maximise their data and fail to gain the insights from what they have.
Maximising your data assets
So how can organisations gain a better understanding of their data assets? Data governance services that scan data sources both on-premise and cloud can be implemented, to classify data and identify private information – in turn this can help to reduce security
and compliance risks.
Understanding the data that you have isn’t just a loss in a commercial sense (in terms of missed opportunities) but is beneficial for the other operational aspects (by improving compliance). When it comes to AI and ML, insights can be obtained to improve
defences and serve customers better. AI can help to address common challenges from human error to fraud prevention, so tech has real power to bring about positive change and to build greater trust with customers.
The data fabric
With both AI and ML, regulatory compliance is crucial and data running through a pipeline should be both compliant and valuable at each stage. Institutions should look to implement a data fabric, so that data can be collected at the edge and then to process
it using powerful GPUs to run models that provide more instantaneous business value.
The cloud can also help to maximise AI by building a multi-cloud strategy that offers increased resilience and a better platform for data to be scaled across multiple environments. With the EU reaching provisional agreement in May on the new
Digital Operational Resilience Act (DORA), organisations now need to think more carefully about their digital risk management and regulatory frameworks. It is likely that the UK will introduce similar legislation in the near future and so there is a need
to get ahead of the curve and be ready for potential regulatory changes rather than falling short of new requirements.
So, to conclude, FS organisations have an enormous opportunity to seize the opportunities of AI, but in order to do that they need to make sure that their data is being harnessed to the fullest potential, used in a compliant way and stored in a flexible
manner. Today, organisations are sitting on masses of data and its’ untapped potential can accelerate FS growth both now and, in the future, it’s not an opportunity to be missed.