Table of Contents
- Recommendation
- Take-Aways
- Summary
- Developing “financial AI” capability is essential to get the most out of your AI efforts.
- Businesses need to get their data in order before integrating generative AI into their operations.
- Using generative AI to increase employees’ productivity can backfire.
- About the Authors
Recommendation
Generative AI – artificial intelligence that can create new content – has become a trendy buzzword in the business world, promising enormous value gains and competitive opportunities. Yet, like many technology trends before it, generative AI’s effectiveness depends on many factors – technical capability, talent management, risk mitigation and ethical considerations. This timely article by a group of McKinsey specialists provides CTOs and CIOs with nine actions that will help their businesses realize the full potential of generative AI.
Take-Aways
- Developing “financial AI” capability is essential to get the most out of your AI efforts.
- Businesses need to get their data in order before integrating generative AI into their operations.
- Using generative AI to increase employees’ productivity can backfire.
Summary
Developing “financial AI” capability is essential to get the most out of your AI efforts.
Generative AI offers a myriad of use options. To avoid implementing uses that don’t add value, CIOs and CTOs need to understand which areas of their businesses can benefit most from generative AI.
“CIOs and CTOs should be the antidote to the ‘death by use case’ frenzy that we already see in many companies.”
They must develop ways to estimate AI projects’ costs and profits and understand what to prioritize based on available resources. It also means reviewing and potentially upgrading the business’s technology architecture to allow for generative AI integration and deciding whether to “rent, buy, or build” AI capabilities.
Businesses need to get their data in order before integrating generative AI into their operations.
Generative AI depends on data input to realize a competitive advantage and create meaningful outputs. Businesses need to prepare by:
- Categorizing and organizing their data. This includes standardizing data, providing metadata and developing training data that takes diversity into account.
- Ensuring that their infrastructure can store large volumes of data.
- Prioritizing data that gives AI “contextual understanding,” such as providing specially formatted knowledge or examples of good answers to feed into AI models.
“CIOs and CTOs will need to become fluent in ethics, humanitarian and compliance issues to adhere not just to the letter of the law but also to the spirit of responsibly managing their business’s reputation.”
Data management for generative AI use also requires CIOs and CTOs to consider ethical questions and how to deal with the risks that come with AI integration. They need to review protocols for data privacy, sensitive tagging, cybersecurity and access control. They also need to learn how to counteract AI “hallucinations”: incorrect replies derived from the response with the highest probability. CIOs and CTOs must be prepared to address inherent biases in data sets and questions around intellectual property.
Using generative AI to increase employees’ productivity can backfire.
Generative AI can massively increase employees’ productivity. For example, using generative AI for software coding can yield up to 80% productivity gains. However, this is only true in the case of very experienced software developers; by contrast, junior developers can see a decline in productivity of up to 10%. This is because reviewing AI-created code for aspects such as quality, functionality and readability requires a level of experience and familiarity with code that early-career developers lack.
“Because nearly every existing role will be affected by generative AI, a crucial focus should be on upskilling people based on a clear view of what skills are needed by role, proficiency level and business goals.”
In other areas, such as customer services, generative AI can significantly increase productivity and job satisfaction at lower job levels. To ensure that businesses have the right resources and skills in place to take full advantage of generative AI, CIOs and CTOs need to get involved in reviewing talent recruitment, development and retention.
About the Authors
Written for McKinsey Digital, this article is a collaboration by Aamer Baig, Sven Blumberg and Alexander Sukharevsky, who are all senior partners at McKinsey; Eva Li, who is a consultant for McKinsey; Megha Sinha and Douglas Merrill, who are partners at McKinsey; and Aditya Pradhan and Stephen Xu, who are associate partners.