Australian banks lead in AI adoption but face key challenges

A new nationwide study reveals that Australian banks are leading in the adoption of Artificial Intelligence (AI), with a significant 83% of banking executives reporting the implementation of AI within their organisations.

Nonetheless, the research spotlights critical challenges that hinder the full realisation of AI's potential in the banking sector.

The “AI Readiness in Australian Organisations” study, jointly conducted by INFORM Australia and YouGov, surveyed 311 senior decision-makers, including 52 from banking institutions. The study's key findings indicate that banks are ahead of other industries in AI readiness, with 48% of respondents claiming full preparedness for AI implementation, surpassing the 32% average across all sectors.

Additionally, the report highlights that 85% of banking executives recognise the substantial value AI can deliver to their operations. However, the study also reveals several critical obstacles. Notably, 27% of banking respondents report having poorly defined AI strategies, compared to 18% nationally. Furthermore, 46% of banking executives struggle with fragmented, siloed data environments, a figure significantly higher than the 24% observed across all sectors. Employee resistance to change also poses a larger problem in the banking sector, with 83% of executives reporting this issue, compared to 73% nationally. Resistance from senior leadership is another concern, affecting 29% of banking respondents versus 20% across all industries.

Martin Bradley, Head of Risk and Fraud at INFORM Australia, commented, "Australian banks clearly recognise AI's immense potential. However, our data indicates that addressing gaps around data infrastructure, talent development, and change management will be crucial to unlock AI's full benefits." He further added, "In the fast-paced world of digital banking, ensuring secure and optimised processes has never been more critical. While it's encouraging to see strong AI adoption, banks must focus on developing robust data infrastructure, AI capabilities, and buy-in at all levels to drive successful automation and maintain their competitive edge."

The full “AI Readiness in Australian Organisations” report provides detailed insights and recommendations, underscoring the need for banks to develop comprehensive strategies that encompass both technological and human elements. The report suggests that overcoming data silos, enhancing AI-related talent development, and fostering a culture of innovation and change acceptance are essential steps for the banking sector.

The findings come at a time when the banking industry is increasingly reliant on technology to improve operational efficiency, customer experience, and risk management. AI's role in enhancing fraud detection, personalising customer interactions, and automating routine tasks is widely acknowledged. However, the study underscores that a piecemeal approach to AI adoption without addressing fundamental organisational and cultural barriers may impede progress.

The INFORM Australia and YouGov study is a crucial resource for banking leaders, offering a roadmap to navigate the complexities of AI adoption. By addressing the highlighted challenges, banks can not only leverage AI for immediate gains but also build a sustainable and scalable AI framework that drives long-term growth and innovation.