Automation and Artificial Intelligence within the Financial Industry

The importance of artificial intelligence (AI) and automation have been at the forefront of
research to understand their impacts and potential improvements they may bring to financial
management and internal operations of financial institutions. Literature has found an acceleration
of digital adoption within financial institutions due to changing expectations from customers,
increased competition from new digital entrants, and the necessity of improving operational
efficiencies given revenue expansion with more customers to service. This paper seeks to
analyze the impact and long-term benefits of AI and automation in enhancing operational
efficiencies and financial management within financial institutions, and understanding whether
the investment or banking sector is more conducive to AI adoption. The paper conducts a
quantitative & qualitative time-series case study analysis across identified financial institutions
and correlating the percentage of services offered without human intervention vs. enhancements
in operational efficiencies measured as cost vs. output (net profitability). The results from the
analysis indicate that automation and AI adoption enhance both operational and financial
efficiency within financial institutions, with a higher improvement witnessed within investment
firms as compared to banks due to similar transaction.