McKinsey & Co. is seeing an increase in the number of clients seeking artificial intelligence-linked projects, reports Bloomberg. Faster adoption of the technology is helping the consulting titan and its peers boost revenue, across industries like Insurtech, following a period of tumult.

About 40 per cent of the New York-based firm’s client projects involve the technology. The number of AI-related customers in the past 12 months is approaching 500, Rodney Zemmel, senior partner and head of the firm’s digital business, said in an interview.

“We believe the long- or the medium-term economic implications are very real,” Zemmel said. He was a final candidate in the recent global managing partner leadership elections at the firm. According to people familiar with the matter, who asked not to be identified discussing confidential information.

Though there’s some degree of hype around AI, “we’re seeing the organisations that are doing that are getting value from it,” Zemmel said. “It’ll be a little longer, and maybe, a little harder than people think, but we’ve got no doubt that the value is there,” he added.

AI adoption across Insurtech

Among those deploying automation rapidly are the traditional and regulated industries such as banking and insurance, Zemmel said. In a June report, Citigroup Inc. said AI is poised to upend consumer finance and make workers more productive. Additionally, with a high potential for 54 per cent of jobs across banking to be automated. Citi also said that the technology could add $170 billion to the industry’s coffers by 2028.

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon has called AI “critical” to his company’s future success. He also noted the technology can be used to help the firm develop new products, drive customer engagement, improve productivity and enhance risk management.

The surge in automation has come as a relief for the broader consulting industry. It has been battling a slowdown in demand for its traditional services. McKinsey, Ernst & Young and PricewaterhouseCoopers have been cutting jobs to weather the slump. Furthermore, Accenture Plc shares tumbled in March after the company warned it’s seen financial-services customers, including Insurtech, rein in spending on its software.

AI’s rise is also diverting some budgets toward specialist consultancies. Although AI-focused units like McKinsey’s QuantumBlack are growing rapidly, according to Zemmel.

McKinsey – QuantumBlack

McKinsey, which has advised everyone from the U.S.’ Pentagon to China’s Ping An Insurance Group Co., currently has about 2,000 people working across QuantumBlack. It has 7,000 staff in total in tech-related fields, according to Zemmel’s estimates. McKinsey’s headcount stood at about 45,000 globally as of 2023 and revenues were at a record $16 billion.

Zemmel said that the firm is still evaluating how the use of AI will impact its own headcount over the longer run. McKinsey had earlier warned about 3,000 of its consultants that their performance was unsatisfactory and will need to improve.

“We’re certainly planning on being agile about it,” Zemmel said. “One thing that’s clear is everybody in our organization’s going to need to know how to use AI and incorporate in their day-to-day work if they’re going to remain relevant to their clients.”