The financial services industry is grappling with a perfect storm of challenges. Persistent economic and political uncertainty, coupled with the likelihood of continued interest rate declines, has helped create a precarious operating environment. Compounding these issues is the relentless march of technological disruption, particularly in the realm of artificial intelligence (AI).
Navigating this turbulent landscape requires a balancing act. On one hand, financial services companies should be continually seeking to enhance their customer experience to fend off the threat posed by nimble fintech upstarts. On the other, they should be diligently managing costs and driving operational efficiencies to maintain profitability.
This dual mandate has become a defining challenge for the industry, with a recent study by KPMG revealing that a staggering 53% of executives expect to cut costs by at least 10% by 2030, but only 24% have been successful in achieving cost reduction goals.
Cost management has emerged as a critical focus area, with many financial services firms exploring various strategies to optimize their operations. Some are embracing traditional shared services models, consolidating back-office functions to leverage economies of scale. Others are pursuing Global Business Services (GBS) models, which involve centralization and strategic outsourcing of noncore activities.
Regardless of the approach, many firms find themselves at a crossroads. Some have yet to embark on the transformation journey, remaining siloed and fragmented, sometimes exacerbated by less efficient outsourcing practices. Others may have achieved initial cost savings by relocating operations to low-cost centers but have reached a plateau, unable to realize further gains without a fundamental shift in their technology and operating models.
Either way, most are in one of two places: still at the very beginning of their transformation journey, remaining highly siloed and fragmented; or stuck in the middle, having already moved some functions to low-cost centers but struggling to deliver true value without a more broad-ranging operating model overhaul.
While artificial intelligence (AI) has been touted as a solution in some cases, most firms have deployed only limited AI capabilities, scattered across platforms and yielding minimal return on investment. These piecemeal AI implementations may have fallen short of delivering the promised transformative impact on operations and efficiency. They tend to operate in silos without integration or coordination. As a result, they’re frequently narrow in scope, focused on specific tasks like data summarization or basic automation.
This piecemeal approach to AI adoption may not offer optimal value for many firms, as confirmed by a recent MIT study. Without a holistic strategy and unified technology platform, the potential benefits of AI are not being fully realized.
To truly harness the transformative power of AI, financial services companies should seek to move beyond these limited and fragmented deployments. A broad-ranging AI strategy, underpinned by a robust technology platform that is designed to enable a more seamless integration and orchestration of AI capabilities across the enterprise, is crucial for driving substantial operational efficiencies, cost savings, and enhanced customer experiences.
Agentic AI has the potential to help address these issues, but it’s no panacea. With the power to automate critical workflows, it can liberate staff from mundane tasks and empower them to concentrate on work that demands human ingenuity and expertise.
This paradigm shift not only enhances operational efficiency but can also foster an environment where human talent can thrive, driving innovation and helping to deliver exceptional customer experiences.
However, those financial services firms already carefully watching costs may be hesitant to invest heavily in agentic AI. They may be further concerned that the staff needed to implement it and take full advantage of its potential may also prove quite costly, especially as a war for AI talent rages across multiple industries.
Furthermore, many financial services firms are rightly very cautious about the potential to introduce new, AI-driven risks into their operations. As agentic AI becomes increasingly integrated into critical business processes, executives may worry about the potential for fraud, service disruptions, or regulatory violations and accompanying fines.
Global Business Services with KPMG Velocity, enabled by ServiceNow, is an agentic AI-enabled offering designed to improve operational productivity of corporate functions. By establishing a unified platform with shared data models and visualizations, organizations can give AI agents a holistic view of business processes.
This enables automation of tasks, compliance monitoring, risk detection, and security enhancements. The result is a more streamlined operation where employees can be freed from repetitive tasks and can focus on higher-value work. This shift not only boosts productivity but can also drive cost efficiency and improve the overall customer experience.
The offering is also designed to address some of the long-standing issues in financial services, such as fragmented technology systems and siloed operations. By consolidating tech infrastructure, Global Business Services with KPMG Velocity can reduce complexity and maintenance costs while fostering better collaboration across departments. Its AI capabilities can enhance risk management by detecting fraud patterns and anomalies that might escape human notice.
Automation also supports stronger compliance by reducing human error and helping to ensure consistent policy adherence. These improvements contribute to greater resilience and regulatory confidence in an increasingly complex environment.
To implement this transformation effectively, organizations are encouraged to adopt a phased approach—starting with back-office functions before expanding to middle and front-office operations. This strategy allows firms to build confidence in the technology, realize early wins, and develop governance frameworks before scaling.
In the back office, AI can automate tasks like data entry and reporting. As the platform matures, it can support risk modeling in the middle office and enhance customer interactions in the front office. This gradual rollout helps to ensure a smooth transition and improve the value of agentic AI.
As financial services firms are buffeted by economic and competitive pressures, operational and technological evolution has become an imperative. Global Business Services with KPMG Velocity helps to show that AI is at the nexus of these transformations.
Find out how ServiceNow helps put AI to work to streamline operations.
