Find me the AI money
TODAY’S BRIEF
Welcome back to The Brief!?
Today, as investors are increasingly looking for more info about AI's return on investment, we explore which banks are opening up about their ROI using fresh data from the 2024 Evident AI Index – coming out on October 17. Also in this newsletter: highlights from Evident's AI Leadership Roundtable, a dispatch from the RAI Summit in London, and more AI applications in our Use Case Corner.
Looking ahead, please save the date: The Evident AI Symposium is coming up in NYC on November 21st. Scroll down for more info and register today .?
This is a truncated version of our full Brief newsletter subscribe here for the full read. And we want to hear feedback from you: [email protected] .
– Alexandra Mousavizadeh& Annabel Ayles
LATEST FROM THE EVIDENT AI INDEX
MIND THAT $600B GAP
“The AI bubble is reaching a tipping point,” says David Chan at Sequoia Capital. To expand on that mixed metaphor, the bubble may be about to hit the fan! The gap between what’s being spent to build out AI (mostly by tech companies) and the actual revenue realized by that investment is $600 billion this year, up from $200 billion in September 2023, according to Chan. Markets are asking Big Tech hard questions about when and where we’ll see tangible returns on investment. The world’s leading banks are getting them too.
Surely answers are coming, no? We’re crunching the latest data ahead of the October 17th update of the Evident AI Index and well, not really. While 38 of the 50 banks we track announced at least one use case in the last year, only 21 reported any outcomes associated with those use cases. And of those, only two – JPMorgan Chase and DBS – went so far as to specify their total actual realized $ return on AI spend last year.
JPMC: “...roughly the value that we assign to our artificial intelligence use cases is around between $1 billion to $1.5 billion and is in the fields of customer personalization, trading, operational efficiencies, fraud manager, credit decisioning.” (see Page 4 of 2024 Investor Day )
DBS: “Our use of AI/ML became more broad-based in 2023, and we delivered an economic value of SGD 370 million, more than double that in 2022.” (see Page 10 of 2023 Annual Report )
Nothing to Report Here
What banks revealed about the return on their investments in AI use cases, based on investor relations materials (n=50 banks tracked by Evident AI Index)
Our annual ranking of how banks are adopting AI will provide more insights. Look for the updated Evident AI Index 2024 on October 17.
EVIDENT ROUNDTABLE
AI LEADERSHIP PRO TIPS
Speaking of speaking clearly about what you’re doing on AI… the experts we brought together on Tuesday for the Evident AI Leadership Roundtable emphasized that better communications about AI is a hallmark of leadership and maturity.?
James Utting (Chief Business Officer, Group Emerging Technology at UBS) and Ken Usdin , (Managing Director, Equity Research at Jefferies LLC) discussed that and other conclusions from our new Leadership Report . Check out the full recording here for their three leadership hacks. (Hint: show them the money, get your narrative straight and remember: AI is everywhere).?
SAVE THE DATE
NEW YORK, NEW YORK
The Evident AI Symposium is taking place in New York City on November 21.?
The exclusive, invitation-only event gathers the 200 most senior leaders across the banking and AI industries to drive the global conversation on the realities of AI adoption.?
We’ll unpack the key findings from the latest Evident AI Index ranking and take stock of where banks are in their AI journeys. Which banks are leading the way? Where are they delivering value? And what are the headwinds and opportunities on the horizon?
Click below to learn more and register your interest to attend (in person or virtually).
?NOTABLY QUOTABLE
“We find that when AI-powered experiences drive demonstrably better outcomes for customers, this builds trust, confidence, and ultimately engagement – and the more our customers engage with us, the better we can anticipate their needs.”
– Andrew McMullan, CDAO of CommBank,?on their new AI Factory , September 17
领英推荐
THREE RAI TAKEAWAYS
Research Analyst Sam Meeson attended the 2nd annual Responsible AI Summit , a gathering of the best industry minds on the topic, in London this week. To read his three key takeaways, head here to subscribe to the full newsletter. But we will give you one because it’s about saving the planet:?
Hey, big energy guzzler
The heavy use of energy to power LLMs is a growing personal concern for Paul Dongha, head of Responsible AI & AI Strategy at NatWest, because of the commercial and environmental cost that this entails. His presentation on sustainability advocated for cloud providers to disclose how much energy is used when a user writes a Gen AI prompt, which struck a chord in the room among people who thought they had an ethical duty to reduce the carbon footprint of the technology.
MEET THE MODEL
STRAWBERRY SEASON
This week, we’re looking at OpenAI’s new “thinking model” paradigm, as well as some business-friendly announcements from top model providers.
The Model: OpenAI’s o1 models (codename: Strawberry)
What is it? A family of new models, including o1-mini (a smaller model great for code generation )
What does it do?
Other models in the news:
USE CASE CORNER
PICK AN LLM… ANY LLM
In this week’s Use Case Corner, we look at four of the most interesting tools unveiled in the past couple of weeks. But that’s for subscribers only: head here to get the full Brief into your email every other week.?
EVIDENT SPEED READS
5 STORIES THAT CAUGHT OUR ATTENTION
JPMC’s Daniel Pinto raised the bar from $1.5 billion to $2 billion in expected value from AI , driven by a range of use cases and incremental efficiency gains across the business, especially AI in fraud detection. JPMC also filed a patent for “algorithmic bias evaluation of risk assessment models,” allowing it to track when algorithms make questionable decisions.
DBS had twice as many technologists as bankers in 2023, according to a Harvard Business School case-study on the bank. It employed “2,500 data scientists, analysts, and engineers – double the number of traditional bankers.”
CommBank partnered with AWS to launch an in-house “AI Factory” to advance AI and Gen AI initiatives at the bank. They also partnered with the University of Adelaide to establish the CommBank Centre for Foundational AI to foster ML research for applications in finance and other sectors.?
More AI regulations across the globe: The Qatar Central Bank (QCB) issued new rules for financial institutions, and the Hong Kong Monetary Authority (HKMA) issued new guidelines for banks using Gen AI.
Partnering with OpenAI has been “revolutionary” for BBVA, said Head of AI Adoption Elena Alfaro. Bank employees from various business areas “can create their own boards and prototype complex applications.” Previously this would require “specific resources and technical expertise,” but now these capabilities are accessible to those closer to the problems being solved.?
TALENT MATTERS
INDIA IN THE DRIVER’S SEAT
NatWest hired Ruchika Panesar as country head of NatWest in India. Panesar, previously global head of enterprise communications and marketing technology at American Express, will be in charge of a pivotal piece of NatWest’s transformation: 50% of the India workforce reportedly works in technology or analytics, driving around 50% of the global tech operations of the company.?
Westpac named Anthony Miller, head of its business and wealth unit, as their new CEO . The current CEO Peter King is retiring, passing the baton this December. King was an active voice on AI use cases at Westpac , noting its anti-fraud capabilities will be tailored on a customer-by-customer basis.
Standard Chartered appointed Alvarro Garrido as Group CIO . Garrido was previously group chief information security officer at the company.
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Alexandra Mousavizadeh & Annabel Ayles (Shepherd-Barron)