Banking executives are braced for major GenAI impact
It’s pretty much impossible at the moment to have a discussion about the financial services sector without referencing generative AI.
And, according to the latest research from Temenos and The Economist, three-quarters (75%) of banking executives believe their industry is set to be significantly impacted by the emerging technology.
This, in turn, is driving demand for AI skills, with almost one in three (30%) jobs being advertised in the European banking sector now mentioning artificial intelligence.
“The industry is now coming to terms with the significant technological changes that AI brings, and the opportunities it provides for the growth of the global banking sector,” comments Hani Hagras, Chief Science Officer at Temenos.
“We are entering a new era where generative and explainable AI will have the potential to change the face of banking for the better by enabling new business opportunities and services, as well as improved support for the banks and their customers.”
Banking leaders look to unlock value using AI
Economist Impact’s study, commissioned by Temenos, surveyed 300 bank executives from across the globe.
Researchers discovered that, from the perspective of more than 70% of these leaders, unlocking value from AI will be a key differentiator for the growth of banks going forward.
Banks are also using AI and machine learning (ML) to better understand consumers and more effectively deliver personalised, efficient banking experiences.
The most common customer-facing AI tools being developed are chatbots such as Bank of America’s virtual financial assistant, Erica, which has been used by more than 37 million customers in 1.5 billion interactions since 2018.
Previous research carried out by Juniper predicted that chatbots would save banks US$7.3bn in operational costs in 2023, up from an estimated US$209m in 2019.
Temenos launched a secure GenAI solution itself earlier this year, enabling banks to classify and label customer transactions from free text narrative automatically, with a high degree of accuracy in different languages. The tool is helping financial institutions to provide personalised insights and recommendations, offer more engaging and intuitive digital banking experiences, and enhance customer loyalty through more relevant products and offers.
AI is also boosting the prospect of greater collaboration with fintechs, with almost half (44%) of banks looking to acquire majority stakes in fintechs to consolidate their market offering and become one-stop-shop solutions for online purchasing – the new battleground between banks and other non-traditional entrants.
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