Almost nine out of 10 firms working across the pensions sector have started to use artificial intelligence according to a survey by the Society of Pension Professionals (SPP).
The SPP surveyed pension administration actuaries, consultants, investment and covenant advisers, pensions lawyers and professional trustees.
But while 87 per cent of respondents confirmed AI was being used, more than three quarters of them (77 per cent) said it was only for between 1 and 5 per cent of their services.
However, many of this firms are anticipating this initial foray into this new technology will ratchet up in the years ahead.Around 41 per cent of respondents in this survey said they expected AI to be used up in 10 to 20 per in the next 10 years, the same proportion said they expected AI to be use in up to 50 per cent of their services, while almost one in five (18 per cent) expect it to be used in over 50 per cent of their services over this timeframe.
Pension firms value AI ability to do tasks quickly with 61 per cent highlighting speed as the key benefit to the business, with a quarter (26 per cent) citing the cost benefits of AI.
Further anticipated benefits include the insight that AI could bring in terms of analysing patterns within large data sets and identifying unusual data (allowing problems to be detected and addressed at an early stage), scalability and increased personalisation.
The survey also asked SPP members to identify the biggest risks of using AI. Two thirds (65 per cent) cited issues with inaccuracy, particularly around problems of AI ‘hallucinating’ information. A further 10 per cent identified bias while 6 per cent expressed concerns around data protection and cyber security. Almost one in five (19 per cent) said that there is no significant risk provided AI is managed well.
The survey also revealed a number of barriers which may impact widespread adoption of AI across the pensions industry. More than a third (39 per cent) of respondents identified organisational nervousness as the biggest barrier, 16 per cent identified customer concerns, 13 per cent identified the cost of adoption and integration of AI and 3 per cent cited regulatory restrictions.
The SPP said it was also worth noting that nearly a third (29 per cent) of respondents said that there is no significant barrier to the widespread adoption of AI.
SPP council member and a partner at Squire Patton Boggs Matthew Giles says: “The survey results are very helpful in terms of testing the mood of the pensions industry on AI.
“We have obtained a helpful snapshot of the extent to which AI is being utilised today and also a forecast of how adoption will increase in the future. Although the survey highlights risks and barriers to more widespread use of AI, it also identifies clearly identifiable benefits and overall indicates considerable enthusiasm for the technology within the pensions sector.”
