As artificial intelligence becomes increasingly essential for modern financial services, smaller institutions face the pressure to keep up with both the technology and the human talent required to manage it. The challenge is not just adopting AI, but doing so responsibly and cost-effectively, all while maintaining oversight and legal compliance.
Fortunately, there are several ways institutions with modest budgets can sustainably integrate AI. To that end, Forbes Finance Council members share their best strategies for absorbing rising AI and talent costs without compromising innovation or integrity.
1. Leverage Vendor Deployment Support
Take advantage of the professional services offerings of many incumbent and growing AI companies. Inspired by the growing popularity of “forward deployment” models pioneered by Palantir, many AI vendors are offering hands-on support to implement and optimize their solutions. This can make it significantly less labor-intensive for a smaller financial institution to get started on its AI journey. – Gaurav Sharma, Capitalize
2. Relocate Near Low-Cost, Clean Energy Sources
Look at ways to find AI with costs subsidized by advanced energy. Think ahead—and base yourself and your organizations near sources of clean, baseload, sustainable, 24/7 power—like nuclear and fusion in the years to come. Your AI systems will be lower-cost, more efficient and faster for it. – Matthew Chase Levy, AE Blue Capital
3. Build Internal AI Talent Through Internship And Mentorship Programs
Smaller financial institutions can manage rising AI costs by investing in people through strong internship and mentorship programs. Young professionals bring natural AI fluency, applying tools in marketing, IT and operations. This approach builds internal expertise, reduces dependence on costly consultants and creates a loyal, future-ready workforce. – Matthew Iak, U.S. Energy Development Corporation
4. Collaborate And Share Resources
Smaller institutions win by collaborating, not competing. Partner strategically, share AI resources and invest in cross-training your existing team. Efficiency and innovation thrive when technology meets empowered people. – Karla Dennis, KDA Inc.
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5. Evaluate Use Cases And ROI
We have seen many articles published after research that 90% of all AI projects fail. This is happening because we are not thoroughly understanding the use cases, and we are all applying AI to areas that may not need it or are not advanced enough. Smaller firms must conduct due diligence to determine whether AI is the right tool to apply in the first place. If yes, is there a positive ROI to offset the cost? – Kiran Rangarajan, Blue Cross Blue Shield of Rhode Island
6. Utilize Off-The-Shelf AI Models And Vendor Partnerships
Small or large, financial institutions don’t need to reinvent the wheel to keep pace with AI innovation. Keeping costs down is about leveraging what’s already available. Off-the-shelf models can now generate rankings, scores and cross-comparisons across stocks. By scaling these models and partnering with AI vendors, firms can maximize usage at a fraction of the cost. – Brendan Callan, Tradu
7. Automate Tasks And Elevate Human Expertise
Smaller institutions should stop trying to absorb AI costs. They need to let automation handle the routine and sell what AI will never master: trust, empathy and real judgment. The smartest institutions are not replacing people; they are productizing human insight. – Jay Korpi, Piqued Solutions, LLC
8. Use Open-Source Tools And Strategic Cloud Optimization
Start by tapping the vast pool of free, open-source AI tools. Maximize the introductory credits most cloud providers offer to prototype cheaply. Then set a clear cost strategy: rigorously optimize workloads (right-sizing, model choice, autoscaling) and, where appropriate, price AI features so customers share—or fully cover—the incremental compute expense. – Amit Jain, Dhruva Advisors (USACFO)
9. Focus On High-Impact Use Cases And Human Oversight
Smaller institutions should focus AI investments on specific, high-impact areas, like automating routine analysis and partnering with trusted platforms rather than building everything internally. Invest gradually, measure returns and reinvest gains. For oversight, reskill existing teams and embed human review into workflows so AI remains a tool guided by expert judgment. – Paul Peterson, Wiss
10. Set Practical, User-Focused Goals
Many failed AI efforts stem from poor planning and a lack of detailed goals. When considering adding AI tools, leaders need to ask a key question: “What will the realistic effect be on the day-to-day user of this system?” If the answer isn’t that it will make life simpler, it should probably be avoided. That will help smaller institutions avoid runaway costs and, ideally, only lead to cost savings. – Eyal Lifshitz, Bluevine
11. Choose Whether To Buy, Rent Or Build
Small institutions navigating AI complexity should weigh whether to rent, buy or build. Partnering with AI vendors or purchasing commercial solutions can provide expertise and features without heavy development and maintenance costs, while gradually building internal capabilities for the future. – Bryan Lapidus, Association for Financial Professionals
12. Set Clear Guidelines And Use Vetted Tools
Smaller institutions can manage AI costs by setting clear usage guidelines and selecting vetted tools that balance innovation with client-customer protection. Corporations and institutions should implement standards to ensure AI adds value responsibly—maximizing efficiency while safeguarding trust and reducing unnecessary spend. – Cynthia Hemingway, Fourlane, Inc.
13. Start Narrow At First
Smaller firms can manage AI costs by starting narrow—using it to solve one core problem rather than chasing full-scale transformation. Partnering with trusted vendors, sharing infrastructure and training existing staff to oversee AI responsibly can stretch budgets while maintaining control and compliance. – Michael Foguth, Foguth Financial Group
14. Value Precision Over Scale
Value craftsmanship over scale. Use AI as a precise tool—guided by human insight and local knowledge—rather than building massive systems. Instead of chasing data volume or hiring armies of experts, smaller firms can foster “AI fluency” within teams, turning technology into a catalyst for smarter decisions and stronger community trust. – Neil Anders, Trusted Rate, Inc.
15. Invest In Upskilling Existing Staff
Instead of competing for top-dollar AI experts, invest in upskilling existing staff who already understand your clients. You don’t need a 10-person AI team—you need one smart integrator who knows how to apply AI ethically and effectively. – Bob Chitrathorn, Wealth Planning By Bob Chitrathorn
16. Focus On Automation And Workforce Enablement
Smaller firms can’t outspend the giants on AI—but they can out-focus them. Start small, automate what drains time and train existing staff to use AI as a teammate, not a threat. The real edge isn’t more tech—it’s people who know how to apply it wisely and keep the human judgment that clients still trust. – Anatoly Iofe, IceBridge Financial Group, LLC
17. Share AI Costs Through Consortia And Fractional Talent
Think like an AI credit union: mutualize cost, specialize value. Form consortia to share model validation-compliance (risk‑as‑a‑service); rent foundation models, not teams; focus on a few high‑ROI use cases and “fractionalize” talent—pooled model‑risk office and rotating AI officers. Spend on governance, not bespoke plumbing. – Alexandra Vidyuk, Beyond Earth Ventures
18. Understand ROI With Targeted Use Cases And Lightweight Governance
Adopt AI incrementally and align each investment with a clear ROI. Smaller institutions don’t need enterprise-scale solutions to compete—they need targeted use cases with measurable outcomes, like automating fraud detection or streamlining compliance workflows. Pair each tool with a lightweight governance structure to ensure responsible use without bloating overhead. – Alexander Ronzino, Rework Capital LLC
19. Prioritize Pilots And Partnerships
Smaller institutions don’t need bigger AI; they need a smarter strategy. Start with pilots that solve real problems, not hype. Partner, don’t overbuild. Invest in training your people to work with AI, not compete with it. The real cost isn’t the tech, it’s using it without clarity, governance or purpose. – Amer Al Ahbabi, Vertix Holdings LLC
20. Form Strategic Partnerships And Targeted Use Cases
Smaller financial institutions need to focus on forming strategic partnerships through shared service models or fintech collaborations to manage rising AI and talent costs. It will be crucial to prioritize targeted AI use cases with positive ROI, automating high-impact, low-complexity tasks to generate savings and fund future investments – Vineet Shekhar, Meta
The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation.