The AI-Driven Future of Banking: Insights from IBM's 2024 Global Outlook for Banking and Financial Markets

By John Duigenan, General Manager Global Financial Services Industry, IBM

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Following the rise of generative AI across the business landscape, banking executives are exploring how to capitalize on AI’s economic potential, assess the potential return on investment, and mitigate the risks associated with quickly scaling AI enterprise-wide.?

IBM's 2024 Global Outlook for Banking and Financial Markets , a comprehensive report from the IBM Institute for Business Value, offers a deep dive into the transformative potential of generative AI in banking and financial services.??

This report provides critical insights into how generative AI can revolutionize our industry. For many executives, the key question at this early stage of adoption is how generative AI can help address and improve banks’ financial performance.??

In our report, we outline how by focusing on the development and potential of large language models (LLMs), financial institutions can boost productivity, reduce customer friction, and improve the employee experience.??

By garnering these key insights, organizations can see past the hype, assess the real impact on bank business models and create an action plan for effective, trusted, and secure generative AI adoption.??

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Key findings from our research underscore the growing momentum behind generative AI adoption:?

• An astounding 78% of institutions are already tactically implementing generative AI programs.?
• Over 60% of generative AI decision-makers prioritize platforms that support risk controls and compliance.?
• More than 60% of banking CEOs express concerns about cybersecurity vulnerabilities and regulatory risks.?

When engaging with senior executives globally, three specific use cases emerge as focal points for generative AI adoption:?

1. Enhanced Customer Experience: Streamlining customer interactions and providing personalized, frictionless experiences are paramount.??

1. Employee Productivity: Improving efficiency and productivity in back-office and middle-office processes is a priority for CFOs and CIOs.??

1. Application Development and IT Operations: Modernizing core systems and streamlining IT operations is crucial for future readiness.??

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At the heart of our generative AI offerings lies watsonx, IBM's enterprise-grade AI platform. Watsonx is designed to operate seamlessly across various environments, including on-premises data centers. By offering organizations AI studios for model building and training, open-sourced foundational models, and an open data lake house component, watsonx empowers clients with unmatched flexibility and governance capabilities and is helping financial institutions successfully navigate the complexities of an evolving landscape.??

IBM Think, our flagship client conference is taking place in Boston this week. This will be a pivotal event where we showcase the latest advancements in generative AI, discuss the technology's transformative role in banking and financial services, and introduce the latest enhancements to watsonx—developments that will be sure to spark significant conversations and activity throughout the second half of 2024.??

Read the report to learn more about we can harness the power of AI to drive innovation, efficiency, and trust in financial services.?