The AI Index: AI Adoption in Financial Services | Alexandra Mousavizadeh of Evident

Foundation Capital hosted our first Fintech x AI PortCo Summit in June 2023 to help executives across the Foundation Capital Portfolio answer the question “What should I be doing about AI?”

Founders and leaders from over 35 Fintech companies convened to share their learnings and gather perspectives on this essential question.

Alexandra, the CEO of Evident, presented learnings from the company’s first-ever AI Index. This study takes an “outside-in” approach to analyze AI adoption among the 23 largest banks in North America and Europe, all of which manage over $1 trillion in assets. The goal of Evident’s Index is to benchmark AI maturity in the banking sector and gather best practices. In doing so, the report provides banks with a clear framework to build their AI strategies.

The Index evaluates banks’ AI maturity across four key pillars: talent recruitment and development, innovation (which includes R&D, patent activity, investments, acquisitions of AI-first companies, academic partnerships, and engagement with the open-source community), executive leadership, and transparency around AI use cases and outcomes. The Index draws on a range of data sources, including company disclosures, executive interviews, LinkedIn, Crunchbase, GitHub, Google Patent, Google Scholar, arXiv, and academic conference websites, among others.

The results reveal that most advanced banks are quickly becoming AI-first businesses. The top 10 spots are primarily held by North American banks with long-standing AI strategies. J.P. Morgan leads by a wide margin, followed by the Royal Bank of Canada and Citigroup. Across the board, banks are exploring the use of generative AI in various areas including wealth management, software engineering, customer service, and product development.

Alexandra pointed out that a gap is forming between these front runners and the banks that have been slower to adopt AI strategies. Many banks are underestimating the changes required to stay competitive in an AI-driven future. The intense competition for skilled talent, along with the inertia created by legacy systems, threatens to widen this gap.

Alexandra closed by highlighting the challenges banks encounter in adopting AI, such as the “black box” nature of AI algorithms and the emergence of new risks related to data bias, privacy, and security. Nurturing technical talent, promoting collaboration across different departments (including engineering, business development, product, design, and legal), and transparently measuring the impact of AI on business outcomes will help encourage responsible adoption. So too will updating data and technology infrastructure, educating executives about AI, and proactively addressing privacy, security, and ethical concerns.