Half of finance AI projects to be cancelled by 2024
New Delhi: As the banking and financial institutions adopt artificial intelligence (AI)-driven technologies globally, half of current finance AI deployments will be either delayed or cancelled by 2024, a new report has forecast.
At the same time, the use of business process outsourcing (BPO) for AI will rise from 6 per cent to 40 per cent within two years, according to Gartner.
CFOs face major barriers to scaling up the use of AI in-house and will increasingly turn to business process outsourcing (BPO) solutions to meet their digital transformation objectives, the report noted.
“While finance departments have made reasonable progress in laying the groundwork for AI, the challenges come when attempting to scale up solutions that can manage the complexities of function-wide use,” said Sanjay Champaneri, senior director analyst in the Gartner Finance practice.
“The upfront costs of building scalable infrastructure in house, and the over-reliance on stretched citizen developers, will lead many CFOs to rethink their current strategies,” he mentioned.
Digital automation in finance often fails to meet the expected benefits outlined in business cases for deploying such technologies.
Much of this is down to a lack of truly functional automated processes and a significant proportion of automation work fails and is rerouted to a human for manual input.
Without correcting for this state of “fake automation”, finance departments will struggle to scale automated solutions, such as AI, effectively across the function, the report said.
Champaneri said that finance departments will face three key barriers when attempting to scale up their AI processes across the functions.
These are costly upfront infrastructure, lack of bandwidth among citizen developers and skill-gaps among citizen developers.
“CFOs need help operationalising AI, and also ensuring that their limited resources are focused on projects generating the highest return of efficiency,” said Champaneri.
“This reality will drive a significant growth in the use of BPO providers for AI, which offer ready-made solutions to overcome these barriers,” he added.