Almost half of bank executives polled recently by KPMG believe that generative AI will be able to manage 21% to 40% of their teams' regular tasks by the end of the year.
Heavy investment
Despite economic uncertainty, six out of ten bank executives say generative AI is a top investment priority this year, according to an April KPMG report that polled 200 U.S. bank executives from large and small firms in March about the tech investments their organisations are making. Furthermore, 57% said generative AI is a vital part of their long-term strategy for driving innovation and remaining relevant in the future.
“Banks are walking a tightrope of rapidly advancing their AI agendas while working to better define the value of their investments,” Peter Torrente, KPMG’s U.S. sector leader for its banking and capital markets practice, noted in the report.
Approximately half of the executives polled stated their banks are actively piloting the use of generative AI in fraud detection and financial forecasting, with 34% stating the same for cybersecurity. Fraud and cybersecurity are the most prevalent in the proof-of-concept stage (45% each), followed by financial forecasting (20%).
Nearly 78 percent are actively employing generative AI or evaluating its usage for security or fraud prevention, while 21% are considering it. The vast majority (85%) are using generative AI for data-driven insights or personalisation.
Senior vice president of product and head of AI at Alphasense, an AI market intelligence company, Chris Ackerson, stated that banks are turning to third-party providers for at least certain uses since the present rate of AI development "is breathtaking."
Alphasense the and similar companies are being used by lenders to streamline their due diligence procedures and assist in deal sourcing in order to identify potentially lucrative possibilities. The latter, according to Ackerson, "can be a revenue generation play," not merely an efficiency increase.
As banks include generative AI into their cybersecurity, fraud detection, and financial forecasting responsibilities, ensuring that their employees understand how to appropriately use generative AI-powered solutions has become critical to assuring a return on investment.
Training staff on how to use new tools or software is "a big element of all of this, to get the benefits out of the technology, as well as to make sure that you're upskilling your employees," Torrente stated.
Numerous financial institutions, particularly larger lenders, are already investing in such training as they implement various AI tools, according to Torrente, but banks of all sizes should prioritise it as consumer expectations shift and smaller banks struggle to remain competitive.
