As much as 75 per cent of banking executives believe their industry will be significantly impacted by generative AI; according to the SaaS cloud banking solution provider, Temenos.
The Economist Impact study, commissioned by Temenos, surveyed 300 bank executives from across all five continents and found that for over 70 per cent, unlocking value from AI will be a key differentiator for the growth of banks going forward.
In the report, Temenos also found that around 30 per cent of jobs currently being advertised in the European banking sector mention AI. This highlights the clear demand for AI skills in the industry – and points to a likely skills gap in the space as more and more institutions choose to adopt AI technology
Banks are also using AI and machine learning to better understand consumers and deliver personalised, more efficient banking experiences more effectively.
Currently, the most common customer-facing AI tools being developed are chatbots – with the likes of Bank of America’s virtual financial assistant, Erica, being used by over 37 million customers in over 1.5 billion interactions between 2018 and 2023. Research has found that banking chatbots – offering personalised experiences to customers – will also save banks $7.3billion in operational costs in 2023.
Temenos explained that the launch of ChatGPT by OpenAI is the key driver behind the hype that now surrounds generative AI. It says the launch demonstrated the potential of AI to transform everyday tasks and spurred companies to find the best ways to leverage it. Overall, 71 per cent of respondents agreed that unlocking value from AI will be the key differentiator between ‘winners and losers’.
Ai changing ‘the face of banking for the better’
Hani Hagras, chief science officer at Temenos: “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.
“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.”
Temenos also explored predictions for the future of relationships between fintechs and banks. Banking executives surveyed foresee relationships within the industry evolving over the next one to three years.
As many as 44 per cent of survey respondents believe that banks will acquire majority stakes in fintechs and 32 per cent believe that there will be market consolidation among challenger banks in the next one to three years. These were lower in 2021, at 41 per cent and 23 per cent respectively.