With the renewed interest in AI spurred by the emergence of generative AI, the finance sector finds itself at the forefront of AI integration, exhibiting
. This is primarily attributed to the strong adoption of traditional AI, such as machine learning (ML), which has been used widely in the sector since the late 2000s. Generative AI, while currently less commonly used, will likely take hold in the industry in the coming years. In 2023, the financial services industry invested an
. Among the largest banks in the Americas and Europe,
, followed by JPMorgan Chase, and the Royal Bank of Canada. The high adoption rate of AI, along with the robust spending on AI technologies, signal the industry’s readiness to adapt to an AI-centric world.
How do financial institutions use AI?
AI has become integral to various business segments within financial institutions, with each area leveraging its capabilities differently. The operations business segment had the
highest AI adoption rate in 2023, with risk and compliance following closely behind. Within this segment, the
most widely used applications of AI were financial reporting and accounting, as well as cloud pricing optimization. In sales and marketing, the forefront is adorned with voice assistants, chatbots, and conversational AI, enriching customer interactions and streamlining services. Meanwhile, in people management and HR, AI shines in workforce scheduling optimization, facilitating better resource allocation, and enhancing productivity. However, despite the manifold benefits, financial institutions face various
challenges in AI implementation. Data issues loom large, with concerns over privacy, sovereignty, and disparate locations posing significant obstacles to seamless integration. Additionally, recruiting and retaining AI talent remain pressing concerns, impeding the sector's full realization of AI's potential.
The rise of generative AI in finance
In 2023, among the financial institutions worldwide that used AI, over two-thirds used AI in data analytics, making it the
most widely used AI use application in the industry. Data processing and natural language processing were also among the more commonly used AI use cases, all traditional AI applications. Nevertheless, over 40 percent of financial institutions used generative AI, with more ongoing explorations among industry leaders. The global generative AI market in finance is
forecast to increase at a compound annual growth rate of 28.1 percent between 2023 and 2032, rising from 1.09 billion U.S. dollars in 2023 to 9.48 billion U.S. dollars in 2032. This growth, along with the increasing adoption, indicates an expanding focus on generative AI. Successfully implemented, generative AI could significantly impact the banking sector, with the total
potential added value ranging from 200 to 340 billion U.S. dollars, equivalent to three to five percent of the total industry revenue.
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