New FICO and Corinium Report Finds Financial Services Firms Lack Responsible AI Strategies Despite Surging Demand for AI Solutions

Rhea-AI Summary

FICO's latest report highlights growing AI initiatives within financial services, with 52% of leaders prioritizing AI more than last year. However, only 8% of organizations report fully mature AI strategies, and 71% have yet to integrate AI ethics into their operations. The survey reveals significant challenges, including struggles with AI governance, as 43% of organizations face regulatory hurdles. Notably, 74% see improved customer experience as the primary benefit of adopting Responsible AI practices. FICO emphasizes the need for robust ethical AI standards to enhance brand loyalty and mitigate reputational risks.

Positive

• 52% of financial services prioritize AI initiatives more than last year.
• 74% of organizations report improved customer experience as a benefit of Responsible AI.
• 69% believe Responsible AI creates new revenue opportunities.

Negative

• Only 8% of respondents have fully mature AI strategies.
• 43% struggle with AI governance structures to meet regulatory requirements.
• 71% have not integrated AI ethics into operational strategies.

Report surveys 100 banking and financial C-level AI leaders on how they are ensuring AI is used ethically, transparently, securely, and in customers’ best interests

SAN JOSE, Calif.--(BUSINESS WIRE)-- FICO (NYSE: FICO):

Highlights:

• 52% of financial services organizations say AI initiatives are a higher priority than 12 months ago.
• Only 8% of respondents report that their AI strategies are fully mature with model development standards consistently scaled.
• 43% of organizations say they struggle with AI governance structures to meet regulatory requirements.
• 71% of organizations state that AI Ethics and Responsible AI are not yet a core part of their operational strategies.

Today, global analytics software platform provider FICO released its third annual State of Responsible AI in Financial Services report, developed in collaboration with market intelligence firm Corinium. The report found that the demand for AI products and tools are on the rise with more than half of the respondents (52%) saying they are a higher priority than 12 months ago, yet the vast majority (71%) have not implemented ethical and Responsible AI in their core strategies.

Conducted by Corinium and sponsored by FICO, the report surveyed 100 C-level AI leaders in the financial services sector to examine where enterprises stand in implementing their AI strategy, approaches to AI ethics and governance, and their outlook on the future of AI initiatives.

“Even though we have seen a growth in demand for AI-driven financial products and offerings, many financial services firms have yet to develop and hold themselves accountable to Responsible AI standards,” said Scott Zoldi, Chief Analytics Officer at FICO. “Beyond fulfilling an ethical responsibility to their customers, implementing standards for Responsible AI that is explainable, auditable, and ethical helps to improve brand loyalty, reduces reputational risks, and better enables regulatory standards to be met.”

Currently, only 8% of respondents say that their AI strategies are fully mature with model development standards consistently scaled across their organizations. However, organizations are beginning to appreciate the benefits of implementing a Responsible AI strategy.

The study found that the number one benefit of Responsible AI was improving the customer experience. Delivering better experiences for customers (74%) was listed as the top benefit of Responsible AI, followed by creating new revenue opportunities (69%), and protecting brand equity/minimizing reputational risk (63%). These findings underscore that responsible use of AI protect organizations from risk and improve customer relationships, allowing financial services firm to leverage enhanced customer trust to gain market share.

"In order to succeed in AI digital transformation, it is imperative that organizations are committed to strong ethical AI practice and governance," said Chun Schiros, SVP and Head of Enterprise Data Science Group at Regions Bank. “As we increase the use of AI applications, continuous learning and considerations of fairness and explainability are crucial to support.”

Defining Responsible AI

Corporations that undertake the process of defining Responsible AI involve leadership in aligning on a codified strategy to demonstrate how ethical AI and AI governance will be enforced in their business. However, this process remains elusive; 43% of financial services organizations report that they struggle with AI governance structures to meet regulatory requirements, and only 44% have sufficiently defined standards for Responsible AI at the board level. Just 8% of organizations describe their Responsible AI standards as mature, illustrating how this is a fluid process for many organizations.

Moreover, 57% of organizations lack agreement on how to measure AI model bias and disparate impact, and half (50%) lack an AI model development standard. The survey results show that a startling 27% of organizations indicate they haven’t started defining their Responsible AI capabilities at all.

A complete copy of the FICO-sponsored report, State of Responsible AI in Financial Services, can be downloaded here.

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail, transportation and supply chain, and many other industries. Using FICO solutions, businesses in nearly 120 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of rental cars are in the right place at the right time.

Learn more at http://www.fico.com.

Join the conversation at https://twitter.com/fico & http://www.fico.com/en/blogs/.

For FICO news and media resources, visit www.fico.com/news.

FICO is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230118005271/en/

Julie Huang

press@fico.com

+1 925-405-7803

Source: FICO

FAQ

What does the latest FICO report say about AI in financial services?

The latest FICO report reveals 52% of financial leaders prioritize AI more than last year, yet only 8% have mature AI strategies.

How are financial services organizations implementing AI ethics according to FICO?

FICO's report states that 71% of organizations have not yet made AI ethics a core part of their operational strategies.

What challenges do financial services face in AI governance?

The FICO report shows that 43% of organizations struggle with AI governance structures to meet regulatory requirements.

What benefits do organizations see from implementing Responsible AI?

According to the FICO report, 74% of organizations see improved customer experience as the primary benefit of Responsible AI.

What percentage of organizations have defined standards for Responsible AI?

Only 44% of organizations in the FICO report have defined standards for Responsible AI at the board level.