An overwhelming majority of those in the financial services industry are using artificial intelligence (AI), demonstrating the value it provides for the industry, according to a new report by Ernst & Young.

A survey of 300 financial officials with more than $2 billion in assets under management found that 99% are using AI in some way, hte firm said.

In addition, all respondents said they are either using or plan to use generative AI (GenAI) within their organization. GenAI is an AI that creates text, images, or other media, using generative models.

“The advances with GenAI have significantly democratized the ability to develop AI-powered assets,” said Phil Andriyevsky, who leads the data and analytics business of the firm's wealth and asset management division. “The cost of development and time to market for certain use cases has gone down significantly.”

The survey also revealed some apprehension in the financial industry about AI technology.

About 20% percent of the respondents said that they were either nervous or skeptical about the impact GenAI could have on their firm. The same percentage also expressed a lack of confidence in their own firm’s ability to take advantage of the technology's potential benefits. 

The insurance industry is the most nervous, with 24% in that group expressing skepticism, followed by wealth and asset management at 21%, Ernst & Young said. The lowest are the banking and capital markets leaders at 17%, the study found. 

“While there’s a whole world of possibilities and efficiencies AI can create for financial services in areas ranging from data analysis to customer service optimization, blind optimism and hype around the technology can ultimately have a counterproductive impact on a business,” David Kadio-Morokro, the firm's Americas financial services innovation leader, said in a press release.

Despite the concerns, the overall thoughts about it are positive, according to the study. Fifty-five percent felt supportive and optimistic about using AI in their firms. 

Also, 77% of executives said that GenAI will provide an overall benefit to the financial services industry within the next five to 10 years. The area they see the most potential is in the customer and client experience, with 87% saying AI can improve that area.

Forty percent identified a lack of proper data infrastructure as a hurdle while 35% said it was the lack of technology infrastructure.

In addition, 36% said it would be a failure of leadership to commit to the concept and 33% identified the biggest hurdle as being a confusing governance and ethical framework.

Trust is another area regulated industries like the financial sector still have to contend with, Andriyevsky said. 

“In the regulated industries, there still needs to be that human control factor for multiple reasons,” he said. “In the regulated space … trust is still a major factor, and we see that as probably the largest barrier to scale at this point.”