Navigating AI Disruption And The New Competitive Edge In Finance

The financial markets have been all over the board recently. The Cboe Volatility Index (the famed “fear gauge”) jumped 28% in the first quarter of 2025, and the S&P 500 logged its worst quarterly performance since early 2022. At the same time, generative AI hype has reached a fever pitch where banks and insurers are racing to deploy chatbots, AI traders, and AI-driven analytics in hopes of staying ahead. A recent survey from EY found 90% of European financial services firms have integrated AI into their operations. The message to executives is clear: adapt or fall behind. But adapting is easier said than done.

Jay Kiew, a change navigation strategist, believes there’s a hidden factor separating the firms that thrive from those that flounder. It’s not superior technology, a bold strategy, or even exceptional talent. It’s something Kiew calls “change fluency,” and evidence suggests it’s now the biggest predictor of which companies will still be standing five years from now. In fact, organizations with high change fluency have delivered shareholder returns 143% higher than their less adaptable peers. As AI disruption only accelerates, this ability to skillfully navigate change may be the most vital business capability of all.

What exactly Is Change Fluency?

Essentially, change fluency is all about an organization’s ability to spot shifts early, absorb disruptions without missing a beat, and turn uncertainty into opportunity. It’s not about following a rigid playbook but more like building muscle for adaptability. Just like learning a new language, the goal isn’t to memorize every single rule and word, but to develop a natural feel for how to respond in the moment. The most change-fluent financial organizations don’t just react—they process all the signals around them including n markets, technology, or customer behavior and use them to drive innovation that lasts.

Jay Kiew compares it to speaking a language fluently. True fluency means you’re able to express ideas naturally across diverse contexts, rather than haltingly translating every thought word-for-word. In the same way, a change-fluent organization doesn’t need to scramble for a plan every time a new AI tool or fintech challenger appears. It already has the cultural vocabulary to respond smoothly and confidently. This means less hesitation and inaction when facing uncertainty and more proactive moves that turn turmoil into opportunity.

The Pitfalls of Traditional Change Management in Finance

In the financial services sector, the pressure to transform is real—but so are the challenges. Too many organizations are still relying on outdated playbooks that simply don’t cut it in today’s fast-moving, tech-driven, AI-enabled world. Two common traps that organizations far too often fall into are:

• Initiative Overload: Banks and insurers often pile on dozens of “strategic initiatives” to chase the next big thing -AI! Blockchain! Digital everything! – without stopping anything else. Continually adding new projects without retiring existing ones spreads organizations dangerously thin. Kiew recounts a financial services firm that launched 27 strategic projects in 18 months while retiring exactly zero legacy efforts. The result? Exhausted teams and mediocre outcomes across the board. After leadership imposed a simple “one in, one out” rule for new initiatives, the company’s performance metrics jumped 37% within two quarters. The lesson: doing more isn’t the same as doing better. In fact, too much change at once becomes unmanageable noise.
• Top-Down Change (and Employee Pushback): Traditional change management tends to treat transformation as something leaders do to employees. It’s often viewed as a mandate handed down from the C-suite with a detailed roadmap and fixed end-state. Nowhere is this more true than in heavily regulated financial firms with strict hierarchies. However this approach often backfires. Front-line employees and middle managers, who are asked to execute new AI tools or process changes, feel little ownership. In banks, it’s not uncommon for a big tech rollout to fizzle because branch staff or analysts quietly stick to the familiar “old way” of doing things. People resist being forced to change on someone else’s schedule. People don’t necessarily oppose the new technology itself; they oppose having it foisted on them without input. And the outcome is predictable. Low adoption rates,often barely 50% industry-wide for new systems, and change fatigue that leaves the organization even less prepared for the next disruption.

Financial services leaders are thus caught in a paradox. They must innovate quickly to survive the onslaught of AI-driven fintech and shifting consumer expectations. Yet, their usual methods of driving change can create organizational indigestion, or worse, active resistance. This is where cultivating change fluency offers a way out—shifting how leaders and teams think about and engage with change at a fundamental level.

Three Mindset Shifts to Build Change Fluency

Becoming a change-fluent organization isn’t about rolling out a training program or installing the latest software. It starts with a mindset shift at all levels of the organization. Through his work with hundreds of executives, Kiew has identified three pivotal mindset changes that distinguish companies adept at navigating uncertainty:

1. Embrace Wonder Over Certainty: In fast-changing scenarios, certainty is often an illusion. Yet, many business leaders react to uncertainty by grasping for more data, detailed forecasts, and guaranteed outcomes. The change-fluent mindset flips this script. Instead of asking, “Where’s the proven business case for this AI investment?”, you should be asking, “What might this make possible?” Approaching uncertainty with curiosity opens up new paths. For example, when the gaming industry was upended by mobile devices, Nintendo didn’t freeze up seeking a perfect plan. Their teams observed how people wanted gaming to fit into every aspect of life and asked imaginative questions about the future of play. The result was the Nintendo Switch’s hybrid design—a blockbuster innovation born from wonder rather than fear. Financial institutions can take a page from this approach: instead of over-analyzing every single AI pilot to death, they should encourage exploratory projects and “what if” experiments. Of course, some will fail, but others could redefine how you deliver value to customers.
2. Practice Strategic Sacrifice (Not Just Addition): Success in the AI era isn’t about doing every thing, it’s about doing the right things. Change-fluent organizations have the discipline to drop activities that no longer serve their core purpose..This kind of strategic cleanup is especially important in finance, where outdated products, processes, and systems tend to pile up over time and slow everything down. Shedding them is hard but necessary to move faster. A standout example of this mindset comes from the auto industry.While competitors rushed to launch dozens of electric vehicle models, Toyota initially held back and focused on hybrids—a move critics panned, but which paid off when the RAV4 Hybrid became one of 2024’s best-selling SUVs. The takeaway for bank executives is to prioritize ruthlessly. Maybe it’s time to sunset that marginal product line or cut low-value projects to free resources for high-impact AI initiatives. Adopting a “one in, one out” rule for new projects can force tough conversations about what to stop. By deliberately sacrificing some good ideas, you make room for great ideas to flourish.
3. Co-Create Change Instead of Forcing Change: The most profound shift is recognizing that lasting transformation can’t be imposed. Rather, it must be co-created with the people who live it. The very phrase “change management” implies control, as if change is a machine to be engineered. In reality, change is a human journey. Forward thinking banks are beginning to replace top-down change programs with more inclusive “change navigation.” This means involving employees, customers, and other stakeholders early and often when rolling out new technologies or processes. When one global firm invited front-line staff into the planning of a major digital overhaul, the adoption rate of the new system hit 94% – far above the industry norm. Why? People support what they help create. In financial services, this could mean forming a cross-functional innovation council that gives everyone from loan officers to compliance analysts a voice into how AI tools are implemented. By treating employees as partners in change, you replace fears with engagement and ownership. The organization becomes far more agile because people at all levels are bought in and ready to make the change work.

Actionable Takeaways for Financial Services Leaders

It’s important to remember that achieving change fluency is a journey and executives should start with practical steps today. Here are a few actionable takeaways for financial services leaders looking to boost their organization’s change capacity:

• Make Space for Change: Running at 100% capacity leaves no room to absorb new developments. Carve out slack in budgets and schedules for teams to explore emerging tech and process improvements. If your roadmap is packed with projects, identify at least one initiative to pause or stop. This gives your organization the breathing room to properly digest and integrate change, rather than choking on it.
• Lead by Experimentation: Signal to your organization that learning matters more than immediate perfection. One way to do this is for the C-suite to get hands-on with AI tools. When executives themselves experiment with a generative AI model for writing a report or performing analytics on a dataset using an LLMt, it sets an example of curiosity over certainty. It also equips leaders with firsthand insight into opportunities and limitations of the technology. Encouraging a culture where it’s okay to run small pilots and share lessons learned — even if some efforts don’t pan out, is critical. This visible embrace of experimentation from the top can catalyze a possibility mindset throughout the company.
• Co-Create with the Front Line: Before rolling out a major change, it’s important to ask: Who on the front lines will this affect the most, and have we involved them? Create forums like advisory councils or design workshops to include those voices early. Empower a diverse group of employees to shape the AI transformation agenda, whether it’s by beta testing new tools or redefining workflows. This co-creation not only surfaces practical insights that leadership might miss but also turns would-be resistors into change champions. By the time a new AI system or process goes live, you’ll have a cohort of informed insiders ready to advocate for it.
• Nurture a Safe-to-Fail Culture: Change flourishes in an environment of psychological safety. Employees need to know they won’t be penalized for speaking up about challenges or for trying something new that doesn’t work out. Finance is a high-stakes industry where the tolerance for error is low, but innovation requires some risk-taking and candor. Leaders should actively reward candor and learning. For example, celebrate teams who identify early warning signs of a project going off-track (and pivot in response), just as much as you celebrate big wins. When people feel safe, you’ll hear about issues before they become crises, and you’ll tap into a well of ideas that would otherwise stay hidden. Over time, this culture of safety fuels the confidence to wonder, to sacrifice lesser priorities, and to co-create change — the very behaviors of change fluency.

The pressures of AI disruption and market volatility are very real, especially in financial services where the stakes are high. However, by focusing on change fluency, financial organizations can convert these pressures into progress. The concept of change fluency might sound abstract, but its impact is very concrete: it’s the bank that quickly realigns its strategy when fintech upstarts shift consumer expectations, or the insurance firm that turns a new regulatory mandate into an opportunity to modernize operations. In a world where continuous disruption is the only certainty, change fluency is the decisive advantage. Financial institutions that build this adaptive muscle will not only navigate the storm of AI and upheaval, they’ll steer themselves into new growth opportunities that less fluent competitors never even see coming.