HSBC leads UK Banks in global AI race

HSBC leads UK Banks in global AI race

JPMorganChase has retained its position as the leading global bank for artificial intelligence (AI) maturity in the Evident AI Index, the independent benchmark for AI adoption and performance in the financial services sector.

In a year of relentless AI activity across the banking industry, all 50 banks listed in the Index have ramped up their adoption efforts, with 80% improving their performance since 2023.

According to Evident, the world’s biggest banks see AI adoption as fundamental to their future growth, productivity, and financial performance. They are investing in AI use cases across every area of their business – from customer service to analyst productivity to fraud prevention – to try and maximise their competitive advantage.

The annual Evident AI Index evaluates the ongoing AI performance of 50 major banks in North America, Europe, and APAC against 90 indicators drawn from millions of public data points.

This year’s top three AI performers – JPMorganChase, Capital One and Royal Bank of Canada – have retained their rankings from 2023 by continuing to develop and implement AI at breakneck speed, doubling down on hiring, partnerships and in-house innovation to stay ahead of the field.

There are three new entrants in the top 10: HSBC, the first UK-headquartered bank to feature in the top 10, Canada’s TD Bank, and Morgan Stanley, the first time the US institution has appeared on the leaderboard.

UBS maintains its overall position as the leading AI bank in Europe, largely driven by its strong performance in Talent where the bank ranks 3rd overall.

Notably, the top 10 banks for AI adoption are currently improving 2X faster than the rest of the field. The increase in industry-wide activity is also significant, especially given the number of AI use cases being reported by the banks – moving from a handful of use cases in production last year to 300+ new applications coming into public view.

Based on the Evident AI Index, the ten banks leading the race for AI maturity are:

Alexandra Mousavizadeh, co-founder and co-CEO of Evident, said: “AI has the potential to reshape and transform how the big banks do business, and we’ve seen a frenzy of AI activity and investment across the global banking industry in 2024.

“All the banks are stepping up their AI efforts, and competition amongst the leaders is intensifying, with several powerhouse institutions making gains as they address the potential for AI to deliver a ‘winner takes all’ advantage that could forever change the face of the industry.”

JPMorganChase and Capital One keep up the pace as new challengers emerge

As the leading AI bank for the third consecutive year, JPMorganChase holds by far the largest volume of AI talent across all capability areas of any global banking institution – which is up +16% in the last 12 months – and boasts more AI researchers than the next seven largest contenders combined. Additionally, it is one of only two banks to report realised return on AI use cases – approaching nearly 2 billion dollars.

While JPMorganChase still holds its strong lead in the ranking, Capital One has gained ground in this year’s Index, thanks to its singular focus on AI talent. It leads on density of AI talent relative to overall headcount, and is adding critical AI Development capability at a faster rate than JPMorganChase. Capital One also maintains a leading position on Innovation, owning 38% of AI patents in the Index.

HSBC has been one of the standout performers of the past 12 months, significantly improving its performance across the Leadership, Innovation and Transparency pillars. In Leadership, the bank made major gains in its overall AI Narrative and the “AI focus” of the Executive leadership team, exemplified by the hiring – and recent elevation – of CIO Stuart Riley to the Executive Committee. HSBC has also intensified its focus on innovation, exemplified through new venture investments in Fano Labs (May) and Contextual AI (August).

Morgan Stanley has also made huge strides in 2024, particularly in AI innovation, increasing its research output (up 2.3x vs. 2023) and joining the top 5 banks in AI venture activity. The bank is seeing the upside of its longstanding partnership with OpenAI. Following the launch of AI @ Morgan Stanley Assistant in September 2023, it recently expanded its AI suite of tools for internal financial advisors with the rollout of AI @ Morgan Stanley Debrief in June 2024.

Annabel Ayles, Evident co-founder and Co-CEO said: “JPMorganChase is unquestionably still the bank to beat when it comes to AI maturity. The pace of its AI adoption is remarkable for an organisation of its size and scale.

“All of the top 10 banks improved their AI performance in 2024, but there were several standout performers that went at breakneck pace to try and narrow the gap – from CommBank in Australia to HSBC in the UK.

“The rise of HSBC and Morgan Stanley show that it’s still possible for banks that have been slower out of the gates on AI to catch up and even overtake the field. The race for AI adoption is far from run, but there’s a growing gap between the leaders and the rest of the field. The lower ranking institutions need to pick up the pace if they wish to go the distance.”

Talent, Innovation, Leadership and Transparency in AI

The updated Index reflects the pace of industry progress following a year in which the banks have pressed ahead with a massive AI hiring push, sustained their AI innovation efforts, refined their AI communications strategies, expanded upon their responsible AI principles and started tracking the return on their AI investments.

Talent: The AI workforce across the Index banks grew +17% year-on-year, with AI-specific Software Implementation hires up by a massive 37%. These roles focus on enabling the wider workforce with emerging AI applications, demonstrating the extent to which leading banks are now moving from AI R&D and ideation to organisation-wide implementation.

Innovation: Banks continue to pursue diverse strategies to build, buy, or borrow AI capability. 43 banks have published AI-specific research, 40 banks have participated in an AI-specific venture investment, and 24 banks have filed an AI-specific patent. While still dominated by North American banks, patent activity is up +21% year-over-year.

Leadership: Over half of the Index (26 banks) now share details of AI use cases in production, however, only six banks report on the impact of these use cases in financial terms, and only two banks (JPMorganChase and DBS) report on the total value AI is delivering for their institution.

Transparency: The number of banks publishing responsible AI (RAI) principles tripled year-over-year to 18 banks, while the RAI talent pool grew by 41% year-on-year. These advances are largely being driven by the UK, Canada, and Europe – regions with elevated standards for consumer protection.

According to Evident, the top 10 banks in the Index all demonstrate industry-leading AI performance across at least one of the four pillars, as follows:

Teresa Heitsenrether, chief data & analytics officer, JPMorganChase, said: “AI is transforming how we work at JPMorganChase and has become an increasingly core component of our business strategy. We are proud that our long-term investment in AI talent, insights and solutions has been recognized as industry leading for the third consecutive year. As AI adoption continues to accelerate, the Evident AI Index reflects the growing strategic importance of AI in financial services.”

17/10/2024