Poor preparation hinders AI’s potential in financial services

Readiness and governance are the key to success in AI adoption.

Artificial intelligence (AI) holds transformative promise for financial services, but according to German Soto Sanchez, Head of Corporate Strategy at Broadridge Financial Solutions, many institutions fail to fully harness their potential due to poor preparation and governance.

“AI can drive transformation by driving greater insight,” Sanchez said, emphasising its ability to handle vast data volumes and extract actionable insights. However, Sanchez warned that implementing AI without readiness risks derailing its benefits.

Sanchez stressed that successful AI adoption begins with robust preparation. “You have to think about how you get yourself ready for AI,” he said, pointing to key elements like cloud strategies and ensuring data readiness. Many organisations overlook the foundational transformations required, such as upgrading architecture and creating a clear data strategy.

Sanchez emphasised that poor governance can lead to data inaccuracies, bias, and compliance risks. A lack of oversight has previously resulted in biassed credit decisions, and Sanchez warned that emerging regulations will make governance non-negotiable. “Pay attention to biases and all the different things that can go wrong,” he cautioned.

Another misstep is over-experimentation. Many organisations spread resources too thin across multiple AI initiatives, making it difficult to measure impact. “You should really start off very focused, develop a strong framework, and then gradually expand,” Sanchez advised.

For resource-constrained firms, Sanchez recommended a three-step approach: engaging the ecosystem, experimenting on a small scale, and partnering with experts. “You don’t have to spend a lot of money to start getting engaged,” he said. Building connections with industry stakeholders and launching small projects can help organisations build expertise and confidence.