The report underscores the critical role that data plays in the success of financial institutions. Data-centric decision-making is no longer a nice-to-have; it's a necessity for navigating the complexities of today's markets. Financial institutions are increasingly relying on data to adapt to emerging market trends, manage risk, and optimise operations. The report highlights the use of data-driven decision-making in areas like scenario forecasting, risk identification, and routine supplier risk assessments.

Generative AI is poised to revolutionise the financial services sector, automating complex tasks, enhancing customer experiences, and driving innovation. The report reveals that financial institutions are most likely to be generating profits from their AI investments, but scaling AI effectively remains a challenge. The report identifies key actions that digital leaders are taking to realise the full potential of AI, including adopting an ecosystem approach, seeking radical change, and investing in digital and data foundations.

Financial institutions are also prioritising modernisation and simplification of their IT infrastructure to improve resilience, reduce unnecessary complexity, and enhance business continuity. The report highlights the increasing adoption of cloud-based platforms, which can help simplify digital infrastructures and reduce the cost of technology debt. Nearly one-third of respondents report that public cloud platforms or XaaS technologies have helped reduce the cost of both technology debt and total cost of ownership (TCO).

The report emphasises the importance of collaboration between financial institutions and their workforces in the development and implementation of AI solutions. Financial services organisations are increasingly adopting an open collaboration approach to AI experimentation, recognising the value of diverse perspectives and insights. This collaborative approach is essential for fostering innovation and ensuring that AI solutions are developed ethically and responsibly.

The financial services sector is on the cusp of a data-driven revolution. As AI, data analytics, and XaaS technologies continue to evolve, financial institutions will need to adapt their strategies, invest in the skills and infrastructure necessary to thrive in this dynamic environment, and embrace the opportunities that technology presents. The KPMG Global Tech Report: Financial Services Insights provides a valuable roadmap for navigating this exciting and challenging future.

Dr Leanne Allen will be speaking at our Annual Conference on 27 February, alongside John Middlemiss, Head of Customer Strategy and Katie Sullivan, Customer Strategy at KPMG. Their breakout session 'Driving customer value, experience and trust through AI' will explore how AI is changing the dynamic of customer engagement between general insurers, broker and intermediaries and the insured - the end customer.

Join us at our flagship event as we mark our 40th Anniversary and bring together key industry decision-makers from across the insurance and long-term savings industry. Find out more and book your place.

by Dr Leanne Allen