Welcome to the latest edition of The Current Account! This month's headlines look at how Generative AI (Gen AI) will transform the Banking Industry and the fallout since the implementation of Consumer Duty…
Generative AI set to transform the Banking industry…
- Bank chiefs remain upbeat on the use of AI to boost productivity within their organisations – FS companies are burdened with both large amounts of legacy technology and piles of unstructured data. Such is the impact to productivity, the CEO of JPMC believes AI will contribute towards a shortened work week.
- The impact of AI in Banking is seen most prominently across augmented Customer Services, enhanced Fraud Detection, and effective Risk Management. The challenges of AI within Banking still remain centred around privacy and security, securing a skilled workforce who understand the technology and clear regulatory guidelines. However, rather than being overly concerned about regulation, Bank chiefs are positive about the use of AI in tackling and fulfilling regulatory obligations.
- Such is the prevalence of AI, the ECB is now joining the Federal Reserve, the Bank of England, and the Monetary Authority of Singapore in exploring the use of AI in automating mundane tasks using off-the-shelf AI products. Its “infinity team” is exploring how to generate text, images, and computer software before considering its use in critical banking operations.
- The latest Mastercard Signals Report outlines the potential use cases, challenges, and long-term impact of Generative AI.
- Looking beyond the ‘hype’, in EY’s CEO Outlook Pulse Survey for July 2023, 71% of CEOs surveyed said AI is embedded in their transaction strategy processes, with over half the CEOs having integrated AI into their capital allocation for this year.
- Finally, the rise of AI is fuelling an upward growth in the global banking software market, valued at $11.7 billion in 2022, it is projected to reach a staggering $69.9 billion by 2032, with a robust CAGR of 19.8% from 2023 to 2032.