Who is Leading the AI race?
Evident AI Index 2024 released
For firms across the capital markets industry, the race to lead the artificial intelligence (AI) narrative over the past year has been fierce. Those that race ahead will challenge their rivals on growth, productivity, and financial performance. Those that fall behind risk falling behind in a rapidly changing marketplace.
Although AI isn’t exactly a new concept, 2024 has seen sizeable interest and uptake of AI technologies, and more specifically, generative AI (genAI) solutions against a backdrop of excitement and uncertainty. GenAI is currently a notable driver of AI maturity across the industry, with notable developments seen in research, innovation and talent development.
While there isn’t a universal methodology for gauging the AI credentials of a firm, the Evident AI Index arguably comes closest to this by providing a global standard benchmark of AI maturity among financial institutions. Specifically, the index provides a weighted measure of AI innovation, transparency, leadership and workforce capabilities among the world’s 50 largest banks, using publicly available data. The index is updated on an annual basis, with the most recent version being released this month.
In the 2024 Evident AI Index, 41 out of the 50 banks included in the study improved their score relative to November 2023.
Currently, the top ten banks in the Evident AI rankings are:
The rankings of the top-four banks remain unchanged year-on-year, with the North American banks continuing to dominate, occupying seven spots in the top ten rankings (up from six banks).
As you can see, JP Morgan is top of the rankings, which has now been the case for three consecutive years. It has the largest AI-workforce in the index, which is a term that defines and encompasses roughly 240 AI-based job roles that are currently seen across the capital markets industry. JPMorgan also deployed an AI assistant called LLM Suite to 140,000 employees last month.
Second-place Capital One owned 38 per cent of AI patents filed by the 50 banks in the index.
Morgan Stanley made the most notable jump, rising to tenth from 17th. The bank benefited from improvements in innovation, including new initiatives powered by OpenAI in its wealth management division. In May 2024, Morgan Stanley participated in the Series B round of Daloopa, an AI-powered fundamental data provider for institutional investors.
HSBC also made a huge leap forward from 2023, entering the top 10 after making large gains in recruitment, research, leadership and transparency in its use of the technology. It is the only UK-based bank to make the top ten.
Interestingly, the gap between leaders and followers is growing, even as all of the banks in the rankings made improvements.
Alexandra Mousavizadeh, Evident’s co-founder and co-CEO, noted:
“While scores are concentrating and moving forward, banks at the latter end of the index are struggling to keep up…
The characteristic of the top banks is that they started preparing five or six years ago with restructuring, hiring and putting in a research lab.”
In fact, half of the bottom-ten banks showed declines in scores year-on-year, leaving a cluster of banks that are actively stalling, while the forerunners continue to push ahead. Mousavizadeh’s point around preparation is pertinent here, with the likes of JP Morgan and Capital One spearheading innovation in AI (as shown above) and increasingly putting it at the core of their identity. This is despite a challenging macroeconomic environment (especially in H1 2024), where cost cutting measures have been widespread following a two-year slump in dealmaking. While several banks have preceded with caution during these times, the ones taking on more of a risk on approach, with regard to technology investment, are now seeing the fruits of that labour.
Looking ahead, one of the most feasible ways laggards may look to make up ground in the AI race is bolstering their AI workforce, and favouring a ‘top down’ AI development strategy rather than experimentation. The AI workforce is still a relatively small portion of the overall workforce (3.7 million employees across all 50 banks)—but one that demonstrates robust growth (+17 per cent year-over-year), with significant upside still be to realised.
Across the board, Spanish banking giant BBVA is one of the most consistent performers in terms of AI talent talent and capability development. For the past six years, BBVA has run a Data University designed to provide the ecosystem for data scientists, data specialists, and data engineers to learn and share knowledge about methodologies, tools, and techniques that can be used within the bank. To date, 50,000 Group employees have taken part in some form of training specific to data or AI.
In many ways, investing in such training schemes may help to expedite the long AI maturity journey that still awaits many capital markets participants by improving aptitude of existing employees and attracting new talent that is seeking to become part of of this AI revolution in capital markets.
More information on the Evident AI Index is available here.
For further information, please do not hesitate to contact us at london@greyspark.com with any questions or comments you may have. We are always happy to elaborate on the wider implications of these headlines from our unique capital markets consultative perspective.