The game-changer: How generative AI can transform the banking and financial sectors
The most essential question of the moment: how can AI help address and course-correct banks’ productivity and financial performance?
Following the astonishing rise of generative AI, artificial intelligence has seized the world’s attention. Executives are either dazzled by bright futures or dismayed by dystopian scenarios, and polarizing boardroom discussions proliferate.
Banking executives are brainstorming how to assess and prioritize AI’s economic potential, estimate access costs, and manage the risks that come with quickly scaling AI enterprise-wide. This issue requires meticulous assessment.
These insights can help avoid unnecessary hype and assess the real impact of generative AI on bank business models—and define an action plan that mitigates the associated risks. These considerations are grounded by IBM expertise in providing value-added consulting and breakthrough technology, corroborated by a global survey with 600 executives of primary financial institutions worldwide.
Together, they’ve shaped the insights revealed in the 2024 Global Outlook for Banking and Financial Markets.
Key takeaways
Generative AI is more than this year’s buzzword. For starters, it can redefine a bank’s competitive edge in client relationships, evolve and streamline core banking operations, and bolster cybersecurity
- Almost 8 in 10 institutions (78%) are tactically implementing generative AI for at least one use case. Their tactical approaches vary but trend higher in the risk and compliance space, as well as in client engagement. Additionally, 8% of institutions take a broader, more systematic approach by implementing generative AI across a wider set of business domains scaling throughout the bank.
- AI priorities reflect omnipresent concerns about risk—and client relationships. Almost 60% of generative AI decision makers see higher value in risk control, compliance reporting, and client engagement. Keeping data private and earning client trust is essential to winning engagements.
- AI governance is a must-have. Every banker should be an AI risk manager. More than 60% of banking CEOs indicate new vulnerabilities for cybersecurity (76%), legal uncertainty related to operations (72%), difficulties in controlling outcome accuracy (67%), and prejudice from model bias (65%).
This report was produced by IBM Institute for Business Value (IBV), specialist provider of Research-backed, technology-informed strategic insights that help you make smarter business decisions.
