Generative artificial intelligence is revolutionizing many sectors of the economy, and the banking industry is no exception. In 2023, major banks are increasingly turning to generative AI to improve operational efficiency, customer satisfaction and user experience enrichment. However, this adoption must be cautious, taking into account data privacy and ensuring that generative AI is used to create long-term value.
According to a McKinsey study, the banking sector could gain productivity through generative AI, generating a 2.8-4.7% gain in banking industry revenue by 2030. This would translate into an additional $200 billion to $340 billion gain. This value comes from improving operational efficiency and customer satisfaction that would result from the use of generative AI tools.
In early 2023, some of the major financial players such as Bank of America or BNP Paribas imposed restrictions on the use of ChatGPT by their employees, due to concerns about the confidentiality and security of customer data.
However, other players in the sector have opted for a more open position. Morgan Stanley, for example, has integrated OpenAI-based chatbots (ChatGPT) as a tool to support its financial advisors. These chatbots, powered by internal research and data, serve as enriched knowledge resources, increasing the efficiency and accuracy of financial advice provided by the bank’s employees. Morgan Stanley ultimately aims to deploy similar bots directly to its customers.
This is what Royal Bank of Canada (RBC) has done by developing virtual assistants that provide personalized financial advice, tailored budgets and savings recommendations based on customer spending behavior. This has resulted in a significant increase in customer engagement.
JPMorgan leverages Large Language Models (LLMs) for fraud detection, aiming to add up to $1.5 billion to its revenue. For its part, Goldman Sachs is exploring generative AI to strengthen the effectiveness of software solutions developed internally for employees. As for startups, generative AI solutions are multiplying in the field of finance. As an example, Parthean has launched a financial coach solution through the implementation of generative AI in its application. AI compiles all the financial information, data and news it will cross-reference with the financial profile of users in order to guide them in their life projects and financial management.
For its part, TaxGPT is the ideal assistant to know how to manage your tax returns, VAT or customs duties. StockGPT, meanwhile, is an assistant to guide investors in their choice of stock market investments. Lexata is a generative AI on compliance and legal research topics.
Between increasing productivity and improving the customer experience, generative AI dominates debates related to innovation within major financial institutions. But despite its potential, generative AI must be adopted with caution. Concerns about the biases associated with the data used data privacy and the replacement of human interactions by robots are legitimate. Banks need to ensure that generative AI is used to enrich the long-term customer experience, rather than just looking for short-term gains.