Generative AI is transforming the banking sector by boosting productivity, enhancing customer experience, and streamlining operations. Nearly 90% of engineering teams use AI coding tools, and six out of ten respondents reported at least a 25% increase in developer velocity and productivity due to AI coding tools. Banks are leveraging generative AI to automate routine tasks, improve operational efficiency, and provide tailored financial products and offers to customers.
Generative AI is being used in various applications, including document processing, loan processing, data entry, and compliance checks. By automating these manual tasks, banks can reduce workload and associated risks. Additionally, predictive analytics helps banks identify potential risks and take proactive actions to mitigate them.
Several banks have already implemented AI-driven solutions to improve operational efficiency and reduce costs. For example, HSBC uses AI-driven tools to track transactions and identify potential fraud, while American Express analyzes transaction risks using machine learning algorithms to reduce fraud. Santander has deployed AI-driven solutions to improve operational efficiency across multiple departments, and DBS Bank has developed a system called LOXM, which uses Generative AI to analyze market data and generate trading strategies.
The adoption of Generative AI in banking is expected to continue growing, with over 50% of banks in the US and Europe already implementing some form of Generative AI. The Generative AI banking market is projected to expand from $2.8 billion in 2023 to $75.7 billion by 2028, at a compound annual growth rate of 93.7%. Banks that adopt Generative AI can expect significant efficiency gains, cost savings, and improved customer satisfaction.
