GenAI revolutionizing banking: Opportunities and challenges

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GenAI revolutionizing banking: Opportunities and challenges

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GenAI is changing the banking industry through work automation, individualized customer experiences, and fraud detection. Operational cost savings from using GenAI chatbots in banking globally is 35 times more than not using GenAI. GenAI helps banks increase productivity, lower expenses, and enhance customer happiness.

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What’s inside

  1. Key Takeaways
  2. Reimagining banking through GenAI
  3. GenAI transforming banking landscape
  4. Challenges in GenAI implementation and their solutions

Key takeaways

Among industries globally, GenAI could add about $ 3.5 trillion annually in productivity on average, out of which the banking sector would be nearly 8 per cent. Banks are starting with applications in software development, chatbots and media content generation. GenAI has vast potential to execute business and technology processes autonomously. The operational cost savings from using GenAI chatbots in banking reached $7.3 billion globally. It is 35 times the operational savings without using GenAI. The integration of GenAI with virtual assistants has significantly enhanced customer support and experience. GenAI enables banks to automate crucial processes such as customer onboarding, fraud detection, and risk management. As a result, employees can concentrate on more intricate tasks, such as delivering exceptional customer support. The banking sector can significantly benefit from this, leading to an overall increase in efficiency. Download Complete Research

Reimagining banking through GenAI

Empowering customers through GenAI

  • GenAI enables banks to provide customized products, personalized financial advice enhancing the banking experience for customers.
  • GenAI automates and streamlines banking processes, reducing wait times and enhancing customer convenience.
  • GenAI helps banks strengthen security measures, protecting customers from fraud, unauthorized access, and identity theft.
  • AI-powered chatbots and virtual assistants provide round-the-clock customer support, offering prompt and reliable assistance.
  • Through efficient processes, enhanced security, and seamless support, GenAI enhances overall customer satisfaction with the banking experience.

GenAI transforming banking landscape

Corporate banking, retail banking and software engineering are the most value-creating functions with each providing a value of about $ 50 billion. The rest of the functions include wealth management, asset management, risk, IT and finance and HR. Download Complete Research

The diagram below shows the impact of GenAI on banks’ functional architecture

Future trends in GenAI

GenAI is in nascent stage, but it has the potential for vast changes in banking. The following use cases are expected to prevail in future:

  • Financial forecasting: As GenAI will be able to integrate and analyze data from various sources in future, it will be able to identify data patterns and run simulations based on real-world context and hypothetical scenarios. It can help banks to make effective financial forecasts.
  • Generate financial advice for customers: Training GenAI on customers’ financial goals, risk-taking ability, income, expenditure. It can be used for budgeting recommendations. Also, it can help in smarter investment and wealth management and trading advice.
  • Minimize manual paperwork: Manually analyzing financial documents is costly and time-consuming. GenAI can be used to summarize large documents and significantly cut operational costs.
  • Regulatory code change advisor: GenAI will be used to make developers aware about underlying regulatory changes that will require them to change code. It can assist in automating the changes and providing documentation.
  • Manage risks and credit worthiness: GenAI will be used to create a more accurate picture of borrowers after analyzing vast amount of data from multiple sources.

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Credits
Author@lab45: Poonam Pawar, Hussain S Nayak

Latest stories

Should govt issued IDs be decentralized?

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Should govt issued IDs be decentralized?

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Foundational for identity verification and rights access, government-issued IDs face breaches and inefficiency within centralized systems. Enter Decentralized Identity solutions, redistributing verification control to individuals. But is it applicable for equally for all government services?

What's inside

  1. Decentralized vs Centralized ID for governments
  2. Identity credential issuing process today
  3. Suitability of government functions to Decentralized Identity
  4. Long term outcomes

Decentralized vs Centralized ID for governments

Decentralization of government-issued IDs is a complex issue with potential benefits and drawbacks. Whether government issued Ids should be decentralized or not depends on various factors that we delineate. Any decision on decentralization should be carefully considered and implemented with caution to ensure that they do not breach security or undermine the government’s programs. Download Complete Research

Identity credential issuing process today

Govt Identity Credential Issuing Process
Govt Identity Credential Issuing Process

We detail out the current Issuing process typically followed by governments today and identify several challenges and issues that face it today. This includes Ids like the Passport, Licenses, Voter cards and Social security cards. All of them are critical and everyone can do with an easier and more fool proof process for the same.

Suitability of government functions to decentralization

We evaluate the different government functions such as Education, healthcare, elections, security, taxation, etc and analyze which of these would be most suitable to be decentralized. We map them on a matrix of Complexity & Coordination and the Need for scrutiny to give us an easy framework for assessment. Download Complete Research

Long term outcomes

We end by considering the long term onjectives and intended outcomes of such an exercise.We feel that Decentralized Identity solutions can rebuild trust in public institutions by empowering residents with data control.

Credits
Author@lab45: Sujay Shivram, Abhigyan Malik

Top trending insights

Sustainable airports: The burning need

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Sustainable airports: The burning need

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The aviation industry is expanding rapidly, making it imperative to adopt sustainable practices. Airports worldwide are taking significant measures to reduce their carbon footprint, conserve natural resources and encourage social responsibility but still more needs to be done.

What's inside

  1. Establishing the need for sustainability
  2. Several areas of impact: not just carbon emissions
  3. Top areas to focus
  4. New initiatives to optimize footprint

The need for sustainable airports

The aviation industry contributes to global carbon emissions, with airports accounting for about 2-3% of that contribution. While this is not very significant and airports are committing to Net-zero, they impact the environment in many other ways. Airports consume significant amounts of energy and water and generate waste equivalent to small cities and contribute significantly to noise pollution leading to health disorders in the neighbourhood. Airports also promote economic growth through trade, tourism, job opportunities, support for local businesses, and regional development and hence a sustainable balance is the need of the hour.

Areas to focus for maximum impact

Airports around the world are recognizing the importance of sustainability and are implementing various eco-friendly initiatives to reduce their ecological footprint. Four key areas of focus have emerged: energy, waste, water, and noise. Some leading airports have already implemented sustainable initiatives, such as using recycled materials for construction and mandating the use of reusable tableware in food and beverage establishments. Emerging ideas include hydrogen fuel cells and bio fuels (for energy), AI and IOT Sensors for optimal water usage, hydrothermal liquefaction and AI/ML to detect recyclables for waste and AR safety programs and Noise insulation techniques for Noise impact reduction. Others need to assess their current state and take steps that best suit their situation. Download Complete Research

Credits
Author@lab45: Deepika Maurya

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