Defining Value: The AI Transformation in Banking

Few technologies have moved from relative obscurity to profoundly transforming discussions across various sectors as rapidly as artificial intelligence. Over the last 24 to 36 months, the conversation within banks has significantly shifted from exploring AI's potential benefits to addressing the practical aspects of implementation. Key questions have emerged: How can we establish strong data governance policies? What are the best practices for implementing AI technology? What resources are necessary? Now, after considerable investment in AI in recent years, banks face a new challenge: how to advance their AI initiatives while demonstrating the value of their investments? To better understand banks' perspectives of their AI journeys, KPMG conducted a survey with industry leaders as part of our 2025 GenAI Value Sector series. While there are many insights to share, here are a few key takeaways.

ROI at the Forefront

As noted, banks have invested heavily in recent years in emerging technologies, with 86% of U.S. banking leaders in our survey indicating they view AI as a competitive advantage. At the same time, a nearly identical 84% report experiencing shareholder pressure to demonstrate an immediate return on investment (ROI) on their AI investments. Additionally, more than a third (36%) of these leaders reveal their organization lacks the tools necessary to measure AI’s ROI effectively. Bridging this gap requires a broadening of how banks define the business case for ROI, focusing instead on defining the value of their investments in AI. A near term focus on ROI for example cannot adequately account for the transformative implications of AI. Effective programs ultimately will measure outcomes in other areas beyond revenue growth and include speeding up product development and enhancing customer experiences.

Clear Goals

While banks continue to grapple with balancing near and long term priorities and effectively defining the value of their investments, our findings demonstrate they are clear in their AI goals. Seventy percent said they are seeking to reduce costs while an additional 40% cited enhancing the customer experience. And while only 28% indicated they have experienced revenue growth when asked what benefits they have seen from using AI, 70% indicated they have achieved cost savings. As noted earlier, ROI in the traditional sense is a narrow view of AI’s benefits and one that can result in overlooking benefits such as customer experience. It highlights in part the critical importance of ensuring foundational elements are in place within the organization such as robust data governance, enhancing data quality, and scalable infrastructure.

The Bottom Line

AI is a crucial force that demands strategic foresight and robust implementation. It is essential for leaders to align AI’s potential with overall business and talent strategies, articulating where value will emerge at each stage in a manner that resonates with the C-suite and boardroom. Human expertise remains indispensable alongside AI; and banks must invest in upskilling their workforce, fostering a culture of trust and collaboration, and redefining roles and career paths.

By ensuring coordination of AI initiatives with core competencies, establishing trust, building scalable infrastructure, and fostering a culture of innovation, banks can unlock AI’s transformative potential and drive sustainable growth in the digital age. The time to act is now, and those who embrace AI strategically will lead the future of banking.

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Explore the full report here: ?https://kpmg.com/us/en/articles/2025/intelligent-banking.html