One bank towers above the competition when it comes to AI, a recent study suggests.
What’s new: A report from market research firm Evident Insights measures use of AI by the banking industry.
How it works: The Evident AI Index scored 23 large North American and European banks in four categories. The analysis combined the scores into a total for each bank.
- Talent accounted for 40 percent of a bank’s score. The authors quantified each bank’s talent pool according to LinkedIn pages of 120,000 bank employees who held any of 39 data-science- or AI-related job titles such as data scientist, AI product manager, or quant analyst. They considered each employee’s work history to gauge the depth and gender diversity of AI staff at each bank. The authors also analyzed bank websites, press releases, job descriptions, and Glassdoor postings for indications of how each bank prioritized AI talent; for instance, the number of entry-level roles or upskilling programs available.
- Innovation accounted for 30 percent. The authors counted AI-related research papers and patents generated by each bank, its investments in AI-first companies, academic partnerships, and contributions to open source projects.
- Leadership accounted for 15 percent. The authors examined external communications such as press releases, literature for investors, and social media posts to measure how clearly each bank conveyed its AI initiatives.
- Transparency accounted for 15 percent. The authors examined how clearly external communications conveyed policies with respect to AI ethics, risk management, and management roles.
Results: JPMorgan Chase excelled in all four categories with a combined score of 62.6 out of 100. The next-highest scorers were Royal Bank of Canada (41.4) and Citigroup (39.0). The authors credited JPMorgan Chase with successful long-term investments in AI research coupled with an openness to letting AI talent publish academic work. Other highlights:
- North American banks generally outscored their European peers, holding seven of the top 10 scores. The bottom 12 were all European banks.
- 46 percent of employees surveyed were data engineers. 30 percent were AI developers, 20 percent were quantitative finance analysts, and 4 percent worked with model risks. 34 percent identified as women.
- The authors credited JPMorgan Chase and fifth-ranked Wells Fargo with establishing AI recruitment programs similar to those at tech companies including apprenticeships, graduate roles, internships, and dedicated hiring teams.
- The authors lauded executives at JPMorgan Chase and Royal Bank of Canada for avoiding AI hype in their public communications and, along with TD Bank, hiring AI ethicists and promoting AI ethics.
Behind the news: A growing number of banks are taking advantage of generative AI.
- Engineers at JPMorgan Chase recently trained a language model on statements from the U.S. Federal Reserve, a government agency that sets certain influential interest rates, to predict the agency’s next moves.
- Morgan Stanley, which ranked 10th in the Index, adopted OpenAI’s GPT-4 to interpret financial documents.
- Financial data company Bloomberg developed a 50 billion-parameter transformer model called BloombergGPT to analyze financial documents. It outperformed the 176 billion-parameter BLOOM in tasks like sentiment analysis of financial news and documents.
Why it matters: Finance is among the few industries outside tech that can afford to hire large teams of top AI talent. It’s also a data-heavy industry where applications — fraud detection, financial forecasting, and reconciling and closing accounts — can bring a ready payoff. The combination has made banking a hotbed for AI talent.
We’re thinking: It’s interesting to see one bank so far out ahead in this analysis. We imagine that AI adoption on banking can bring significant first-mover advantages.