Securing Long-Term Competitive Advantage with AI

Today, the advancements in Large Language Models (LLMs) and associated agent technology offer compelling pathways to significant efficiency gains. We see this in the widespread adoption of tools that boost personal productivity and automate routine administrative tasks. These process optimisations – reducing time and cost for standardised operations – are undoubtedly valuable for maintaining a competitive cost structure.

However, relying solely on efficiency enhancement brings a fundamental question: if every organisation can access similar LLM capabilities to streamline the same set of routine processes, does that constitute a sustainable competitive advantage?

AI to differentiate – augmenting the core business

At SEBx – SEB’s innovation studio, we believe it is crucial to apply AI to areas that directly enhance our service quality and elevate fundamental decision-making, not only streamline routine processes. For this, we believe it is important that internal AI experts work closely with the business experts who have deep domain expertise and unique data in these areas to create proprietary solutions that will strengthen our core.

For instance, with the help of AI, client executives could provide more nuanced, actionable insights to the clients. By systematically synthesising complex, disparate data sources, combining internal economic reports produced by SEB experts, public data sources, and internal information about client’s financial situation, one could go far beyond typical business intelligence. Using LLM-powered agents and time series modeling, one could proactively anticipate and model client challenges - ranging from assessing the impact of global events on their operations to simulating how various financial scenarios could affect their finances.

Apart from that, various AI techniques can be applied to crucial quantitative domains. In asset management, time series modeling and prediction can be used to better understand market trends and inform investment strategies. In market risk, AI can enhance the accuracy and robustness of financial indicator modeling, enabling a more precise assessment of market risk exposure.  

Key takeaways

It is exciting time for impactful AI applications. While productivity enhancement has tremendous potential, we believe that it is important to explore long-term benefits of new technology for the core business as well.

Anastasia Varava, Head of Research, SEBx