May 2023

24A —May 2023 — Financial Digest — M id A tlantic Real Estate Journal

www.marej.com

F inancial D igest JLL’s new 2023 Banking and Finance Outlook The banking and financial services industry set to become largest investor in AI

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deliver the largest AI invest- ments in 2023. “Banks are actively enhanc- ing their digital strategy by adopting new automated so- lutions to improve efficiency and provide better experiences for both clients and employ- ees,” said Giles Wrench , vice- chairman, Financial Services, JLL. “AI and machine learning are transforming the banking industry and enabling organi- zations to remain competitive and relevant. Despite rising operating expenses, there has been enor- mous growth in the adoption of technology, data platforms

and AI systems to optimize costs, define new growth models and enhance the cus- tomer and employee experi- ence. Many organizations have already incorporated AI tech into their daily business operations and are employing tools like AI-powered virtual assistants for customers. Technology helps banking and financial services organiza - tions stay ahead of regulatory changes, evolving customer needs and growing competition since accelerating digital in- novation improves operational efficiency and unlocks new sources of value. As such, a

strong real estate strategy that provides the necessary infra- structure to support advanced technologies is vital. Attracting top talent with workplaces that foster innovation To keep up with the rapid pace of AI advancements, financial institutions are pri - oritizing hiring objectives to gain expertise in cloud com- puting, AI, machine learning and programming. Software developers are now one of the most in-demand roles in the industry, and since 2018, the largest banks have increased hiring for software develop-

ers and data scientists by 90%. In addition to software development, cybersecurity and risk management are in high demand as banks face increasing regulatory pres- sures from the U.S. Federal Reserve and FDIC to im- prove risk infrastructure and internal governance. The technology transforma- tion has already been a main driver of footprint expansions for banks looking to differ- entiate their talent pool. TD Bank and BNP Paribas both expanded into Miami; Bank of Montreal, Comerica Bank, Goldman Sachs and PNC all ex- panded into Dallas; and Capital One expanded their presence in Atlanta and Philadelphia. Another way financial servic - es firms attract talent is by of - fering leading amenities, such as LEED buildings, connections to mass transit, neurodiversity support, finishes that create calming environments, energy efficiency, open and collabora - tive areas, quiet spaces and ca- fes with healthy snacks. Firms are also adapting to new hybrid work models to help manage operating costs and maximize space efficiency. Outlook for the banking and financial services sector Even in the face of uncer- tainty around future space needs, financial services or - ganizations signed longer leases in the first quarter of 2023 than pre-pandemic, reflecting their commitment to the role of the office in sup - porting long-term corporate goals. The average lease term length reached 8.4 years in Q1, exceeding the reported length in 2019 of 8.2 years. Finance recently surpassed technology in office leasing activity. The full report focuses on how banks can build on prog- ress to date to maximize ef- ficiency and stay the course for long-enduring business growth, and innovation and talent and location strategy are ways to help achieve that goal. The report also covers navigating cost pressures and increasing regulatory re- quirements; accelerating the net-zero agenda; and align- ing real estate strategy to long-term growth objectives are other ways for banks and financial services companies to combat current challenges and thrive. MAREJ

ccording to JLL ’s new 2023 Banking and Finance Outlook, the

current land- scape is guid- ing financial services or- ganizations to accelerate their digitali- zation efforts to combat challenges.

Giles Wrench

These companies are antici- pated to spend an additional $31 billion worldwide by 2025 on artificial intelligence (AI), meaning the banking and fi - nancial services industry will

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