Emerging Insights from a New Experian Report on AI Utilization
Recent research conducted by Experian, in collaboration with Forrester Consulting, has unveiled critical perspectives among senior decision-makers across Europe, the Middle East, Africa (EMEA), and the Asia-Pacific (APAC) regions. The study surveyed over 1,320 C-suite executives and directors from the Financial Services and Telecommunications sectors, focusing on key themes related to strategic priorities, technology, risk, and analytics.
A striking 75% of business leaders believe that their competitive advantage now hinges on the effective utilization of Artificial Intelligence (AI). The report highlights the growing significance of Generative AI (GenAI) with the analysis of alternative data sources emerging as the leading use case. This underscores a vital shift towards leveraging advanced technologies to improve decision-making processes.
Agility in Analytics: A Necessity for Modern Businesses
The survey reveals a pressing need among business leaders for a more agile approach to analytics. Approximately 76% of respondents expressed concerns over the lengthy timelines currently required to develop and deploy AI and Machine Learning (ML) models. This sentiment indicates a growing frustration with existing methodologies and highlights the urgency for streamlined processes that can adapt to rapidly changing market dynamics.
Despite facing challenging economic conditions—including fluctuating interest rates and increasing pressure to prioritize sustainable initiatives—business leaders maintain an optimistic outlook. The desire to invest in digital transformation efforts reflects this optimism, signaling a commitment to not only survive but thrive in a competitive landscape.
Harnessing Generative AI for Enhanced Decision-Making
The race to fully leverage the potential of Generative AI is gaining momentum. With technological disruption recognized as the foremost external challenge impacting businesses over the next two years, leaders are focused on achieving AI superiority to enhance operational efficiency and minimize costs.
The data shows that 75% of technology leaders are actively pursuing GenAI use cases, intending to implement them within the next year. A noteworthy finding is that 78% of senior leaders agree that generative AI will significantly enhance how they assess risk. The ability to analyze alternative data sources using GenAI not only unlocks critical insights from unconventional datasets but also aids in refining decision-making models for improved customer engagement.
The Role of AI in Improving Customer Experience
The study indicates that access to a centralized cloud-based platform plays a pivotal role in shaping effective risk strategies. Nearly half of the respondents, at 41%, anticipate increased credit stress, including a rise in missed repayments and delinquencies over the next year. In response, 42% of respondents have tightened their lending criteria in the past year.
Risk leaders identified that integrating various data sources, model development tools, and decision-making software enhances the ability to identify financially vulnerable customers. By leveraging AI, lenders can create a comprehensive view of borrowers, facilitating a more effective data-to-insight-to-action process that ultimately improves customer relationships and promotes fair lending practices.
Prioritizing Cloud-Based Solutions for Advanced Analytics
To bolster their analytical capabilities, data and analytics leaders are increasingly focusing on consolidating siloed datasets into a unified cloud platform. Such integration enables enhanced AI/ML capabilities, expediting the model deployment process from what was once measured in months to mere weeks.
The current landscape illustrates that 76% of respondents perceive significant delays in developing and deploying their AI/ML models. Additionally, a significant 63% reported updating their models more frequently than ever in response to evolving consumer credit behavior. The challenge lies in the limited availability of alternative data sources, which hampers the success of analytics programs.
Utilizing a cloud platform maximizes the capabilities of AI to efficiently process and analyze complex unstructured datasets. This leads to enriched predictive models and provides a comprehensive understanding of credit risk.
Investment in Analytics Tools as a Path to Gaining Competitive Advantage
Executives recognize the dual importance of striving for AI superiority and investing in analytics infrastructure. With a clear acknowledgment that many businesses still grapple with the time and resources required for model development, there is an increasing trend towards cloud-based services that seamlessly connect data, analytics, and software.
The CEO of Experian for EMEA and APAC, Malin Holmberg, emphasizes that while leaders possess an optimistic outlook for growth, broader macroeconomic challenges persist. The ongoing financial difficulties facing customers remain a critical concern. The integration of AI and ML tools offers a promising avenue for refining credit assessments for both new and existing customers, enabling proactive engagement with vulnerable clients.
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