The era of GenAI in financial services needs a special kind of leader

Leadership prevails when times get tough. As debates around the future of artificial intelligence (AI) seemingly took (and just as quickly restored) the job of one of its prominent leaders, the ultimate outcome epitomises a simple truth: AI is a leadership imperative with real impact, and must be managed across the board.

When steering this technological transformation, leaders must first take a look in the mirror. While 72 per cent of financial services leaders agree that a strong understanding of generative AI is a required skill for future C-suite executives, only 37 per cent are confident they have the right skills to help implement AI in their organisation.

As generative AI (GenA) ushers in a new era of talent, transformation, and culture of ethical human leadership, financial services leaders must deliberately yet delicately balance the associated risks with rewards while shaping the industry’s AI adoption strategies.

Here are three factors to consider in choosing the right leaders to steer this:

1) Can this person drive the AI agenda?

Across all industries, determining who will lead the technological transformation, as well as how they will do it, is critical in defining success. The right leader must bridge the gap between business objectives, customer engagement, and technology stack, bringing a consolidated strategic view across all of technology, data analytics, and AI to the executive leadership team.

Planning for the future means not only integrating emerging technologies into business operations, but also identifying the right leader to drive the AI agenda.

As AI evolves, adopting a bold, human-centred approach to leadership is one of the absolute necessities in being an effective leader in the era of AI.

The best leaders will possess a desire to learn from and listen to others, combined with the emotional intelligence to manage and motivate.

They will maintain employee morale while nurturing an ethical, mission-driven, motivating culture even through the most disruptive changes.

2) Can this person structure the organisation to facilitate smoother data and information sharing?

The evolution of AI organisational design is intricately linked to business strategy.

Our market analysis and client interactions reveal that AI is nested where financial institutions are most invested.

We observed three nascent and evolving constructs with varying degrees of centralisation in financial services. On one end of the spectrum, AI is decentralised and embedded in the digital and customer experience organisation. On the other, AI leadership comes together in a consolidated centre of excellence, led by a head of AI who in turn reports to the chief technology officer.

A graphic presenting a range of three types of centralisation of AI in financial services firms.
_{SOURCE: RUSSELL REYNOLDS ASSOCIATES, CHART: BTVISUAL}

We’re glad to know that just 28 per cent of financial services leaders have yet to think about how to incorporate generative AI into their operations, as the industry is already well on its way in actively embracing the technology.

As tech teams are key to the commercial success of organisations, leaders across financial services must facilitate collaboration, break down silos, ensure fluidity to enable knowledge sharing, and foster a culture of interdisciplinary problem-solving, where all employees get access to data and insights to make informed decisions, leading to a more inclusive organisational structure.

3) Can this person change mindsets and communicate compellingly?

AI has revolutionised the talent landscape. As the core component of culture, talent across all levels must meet the demands of the AI-driven future. The upskilling of entire workforces isn’t simply about AI ethics, data analytics, and risk management. It requires an evolved mindset – built on systems thinking, empathy, curiosity, versatility, adaptability, and continuous learning – to serve as the foundation of an organisation’s culture and values.

As organisations become more complex, leaders must be able to cultivate a culture of innovation and transformation by communicating powerfully with others. In fact, in analysing thousands of C-suite job descriptions from the last 20 years, we found a 30 per cent increase in mentions of strong social skills. In a technology-driven world with more engaged and empowered stakeholders, the need for leaders to have outstanding social skills to reinforce the right culture is clear.

While there are still unknowns surrounding AI, it is imperative for a company’s leadership to take action now – leading with human creativity, balanced judgement, and strategic thinking to shape a future that is both technologically advanced and human-centric.

Financial services organisations will be expected to maximise AI’s potential by redefining traditional leadership skills. In doing so, they will effectively develop a strategic AI road map tailored to unique needs, objectives, and values.

This article is first published in The Business Times on 18 December 2023.
The era of GenAI in financial services needs a special kind of leader, Working Life - THE BUSINESS TIMES