What are the biggest near-term opportunities for AI in retail banking? What is the state of the market as regards bank implementation and what are some of the barriers holding banks back from faster adoption?
These are just some of the key questions addressed in this GlobalData Instant Insights podcast, chaired by RBI editor Douglas Blakey and featuring a stellar group of industry commentators, namely:
- Zilvinas Bareisis, the director of retail banking and payments practice at Celent;
- Olly Downs, chief technology and AI officer at Curinos;
- Ryan Cox, head of AI at Synechron and
- Andrew Ellis, the US Consulting sector leader for banking at KPMG
“AI and advanced analytics is the biggest technology priority for the industry for the next 18 months,” says Bareisis.
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“At Celent, we work with banks and their technology partners to help them make confident technology decisions. And as part of that, we always track closely where and how banks are investing in technology.
“There are of course different forms of AI, and the one that’s been attracting the most attention recently is generative AI. And I think it’s fair to say that it’s still relatively early days for Gen AI adoption, but our survey shows that already 37% of banks are live with using large language models and Gen AI for things like fraud or process failure detection. 33% use it to support their IT developers and when it comes to actual products and services that use Gen AI, it’s 18% of retail banks that now, globally, are already live with at least one of them. A further 54% are experimenting or running a pilot. Interestingly, the European banks appear to be the most active in this area.”
Bareisis says that as regards the areas banks are planning to invest in Gen AI, 44% of banks highlight digital channels as their biggest priority, followed by 32% that reference marketing, and financial crime at 22%.
Agentic AI: the hot topic in 2025
He adds: “I think the future is quite exciting. If Gen AI was the buzzword of the year in 2024, then this year, the hot topic seems to be agentic AI systems that can essentially operate autonomously. They make decisions and orchestrate specialised AI agents to perform the tasks that you need to achieve a desired outcome. The technology still needs to develop further, quite a bit, but we recommended that bankers should be developing their AI strategy with the anticipation that agentic AI supported workflows will become a viable option in the next five years. But this is still about optimising how the bank operates internally. And of course, in my mind, I think the real game changer is if and when customers themselves start using AI agents that can act on their behalf. Longer term, banks will really have to rethink what customer engagement means for them in this brave new world.”
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By GlobalDataDemocratisation of access to individualised experiences
Curinos’ strategic hire of Olly Downs as chief technology and AI officer emphasised the firm’s commitment to innovation and helping financial institutions thrive in an era of mass personalisation. Downs has built his career pioneering the application of the emerging sciences of machine learning and probabilistic reasoning and has been the inventor on 41 US patents spanning machine learning, personalisation, location-based services and quantum computing. He published his first academic paper on generative AI back in 1999, rather highlighting the point that we have witnessed a number of evolutionary stages of AI to date.
“I think we’re going to see a democratisation of access to individualised experiences, experiences that can really be tailored or personalised to the individual,” says Downs.
He acknowledges the appetite of the banking sector to embrace AI, tempered with caution around the need to ensure compliance with the unique challenges of the banking regulatory environment.
“When I think about compliance in the AI space, I think about it as finding the right points in automated solutions that use AI to insert a human in the loop and create those right boundaries between AI driven and human intelligence driven decision making and experience creation.”
Success requires ‘human + AI’: Ryan Cox-Synechron
The journey from ‘good enough’ AI to yielding ‘great’ innovation and productivity lies in the synergy of human creativity and algorithmic precision, argues Ryan Cox, head of AI at Synechron.
“We’re really thinking about how AI can integrate with the human expertise. It means that banks can ultimately help automate those repetitive, boring and mundane tasks. This allows employees to really focus then more on strategy and creative activities. So that then effectively leads to increased productivity and efficiency and contributes to a higher ROI.
“On the cost reduction side as well, AI can minimise some of the operational costs and minimise some of the errors that happen at scale. I think secondly, we look at innovation and just overall competitive advantage. Humans have that creativity to bring to the table and AI is just not there yet. AI provides the algorithmic precision. And that’s both a combination of Gen AI that everyone’s talking about as just well as some of the classic machine learning. That also helps us drive innovation, to think about new products and new banking services.
“And then finally, I think the third major area is overall improved decision making. That can be at top of house from the C suite, as well as some of the key lieutenants in the organisations, as they’re now able to get data driven insights. That intelligence layer on top of the analytics, really enables banks to make those more informed decisions. That means that you effectively become a lot more data driven and are more accurate and precise in how you unlock that productivity and innovation.”
Exciting things ahead including new channels of revenue: Andrew Ellis, KPMG
KPMG research released in the second half of 2024 highlights the extent to which generative AI is already having a significant impact on organisations. According to KPMG, executive management says revenue growth is the top goal for GenAI investment.
“Where the industry is going is the path of agentic artificial intelligence,” says KPMG’s Andrew Ellis. This allows machines to make decisions based on rules, which is really powerful when it comes to looking for new channels of revenue, efficiencies around credit administration and lending, as well as some of the more traditional areas around back-office operations.”
“There are lots of exciting things ahead. When I look from 2024 to 2025 at the incredible evolution of our clients, such as their [AI] governance and steering committees, they are really making sure they’re being very thoughtful in their approach. With all the implementation and execution work that is going on and the way the technology is evolving, there are some very exciting things we’re looking forward to in the next few years as we work with our clients.”
