@Pixabay.

A new report said that most business leaders think generative AI will augment but not replace existing roles in the workplace. 

This was from Gallagher's second annual survey on AI adoption, which looks at AI's growing impact on risk management and people strategies across global businesses.

In “The 2025 Attitudes to AI Adoption and Risk Benchmarking Survey”, business leaders looked at how Generative AI (GenAI) is now a boardroom reality.

Adoption is taking place at a “ferocious pace” across business functions, said Gallagher. “As organisations are strategically approaching GenAI, vast swaths of the workforce are already using AI tools – and employers are actively adapting to this shift.”

The adoption of AI is key for fund management operations teams as it has been highlighted as a way to balance the admin burden of private markets, meet data regulation needs, and more.

“The common theme is clear: Business leaders feel more aware of the risks of AI today than they were one year ago, and they're making bold and swift moves to mitigate those risks."

The survey captured responses from business leaders to track changes in their attitudes toward AI and the impact of AI adoption on their risk management and people strategies.

“The common theme is clear: Business leaders feel more aware of the risks of AI today than they were one year ago, and they're making bold and swift moves to mitigate those risks,” said Gallagher.

However, what the data also revealed was the variety of strategies being implemented because of AI adoption in their business, it said, which is leading to even more unknown and potentially unpredictable risks.

What did the report say?

The report highlighted the position between what employees want and what leadership teams expect from AI. It said both groups are focused on decreasing the amount of time spent on lower-level, time-consuming tasks.

"AI has immense potential to boost efficiency, automate complex operations and enhance predictive data analysis," said John Farley, Managing Director, Cyber Liability practice at Gallagher, in the report. "However, emerging technology almost always brings new and unforeseen risks to those who adopt it.”

Over the past year, the initial hype after ChatGPT burst onto the scene has given way to a clearer reality for business leaders. At the same time, regulations are coming into force to better guide companies on their professional and ethical responsibilities.

It's therefore perhaps unsurprising that sentiment toward AI appears to have cooled slightly over the course of 2024.

Globally, 68% of business leaders still see AI as an opportunity, but this number is down from 82% a year ago. Meanwhile, the percentage of business leaders viewing AI as a potential risk has doubled to 11%, up from just 5% a year ago.

The path to AI adoption is undoubtedly challenging, with a significant skills shortage emerging as the top obstacle to overcome, along with ethical considerations.

Interestingly, "technical infrastructure challenges" were cited as a top barrier among respondents in our first survey. One year later, that barrier was replaced by "increased compliance issues."

In this report, AI errors, or "hallucinations" — where the system generates inaccurate results — topped the list of risks, according to just over a third of respondents. Other key concerns include data protection and privacy violations (33%) and legal liabilities (31%) related to AI misuse.

These feelings are matched by the wider industry. In a recent piece on Fund Operator, we covered operational efficiency in the modern operating environment without breaking the bank – many respondents spoke of cautious optimism for AI.

“If the business case doesn’t stack up because of the cost of computing, then we’re not going to see the impact of AI on business activity that many people anticipate.”

“The majority of businesses are switching to AI in some shape or form within the industry,” Ashish Doshi, Senior Business Consultant, Insurance Solutions, Ortec Finance, said, highlighting how AI is still growing in popularity.

This does come with downsides, though. The costs of implementing technologies can be high initially for companies, which is a factor to consider when deciding where to invest in AI, as Jacob Dencik, Research Director, Institute for Business Value, said in a report. “Even if something is technically feasible to do with AI, if the business case doesn’t stack up because of the cost of computing or the cost of training these models, then we’re not going to see the impact of AI on business activity that many people anticipate.”

The balance of optimising automated processes against risk is something that Phil Schmoyer, a Principal with Baker Tilly’s digital solutions practice, said needs to be in line with the business's goals. “These decisions should be carefully weighed for each organisation and balanced with your risk tolerance and innovative culture," he said.

So far, so good

From the perspective of companies’ AI adoption journey to date, said the report, it's a case of “so far, so good”. Of those who anticipate a significant impact on their business, the majority think it will be more positive than negative, consistent with sentiment a year earlier, it said.

On average, over two-thirds of the senior business leaders polled rated their AI transformation journeys a “success”.

Respondents from industry sectors that are further along in their AI journeys — namely IT/computing, technology and financial services — are more likely to rate their efforts a success.

In the Insurance Investor Q2 advisory board meeting, the constant pace of change and whether insurers were ‘keeping up’ were among the main factors discussed by senior investment figures. Every participant was either convinced their company was lagging behind or that they weren’t doing enough. There was deep unease about the direction to go into, and the amount of resources needed to keep up was.

“Organisations are building a greater understanding of AI tools, understanding how they can impact work, considering ways that they support use cases, or about governance."

This is a feeling across the industry as many wonder where they need to position themselves.

The report said there was a need for more analysis of what AI could do as it is embedded.

“Organisations are building a greater understanding of AI tools, understanding how they can impact work, considering ways that they support use cases, or beginning to think about governance and upskilling programs,” said Ben Warren, Managing Director and Head of Digital Transformation and AI, HR and Communications Consulting practice, Gallagher, in an analysis of the report.

“However, this is still relatively immature overall, and so full-scale integration of AI into core business operations is going to be a complex, multi-year programme, particularly for larger firms,” he said.

Whilst there may be success for some, it may still be a long journey for others.

 

Please Sign In or Register to leave a Comment.