Artificial Intelligence (AI) has caused a major transformation in the banking industry in recent years. AI is changing the game and altering the retail and wholesale banking industries. As “cloud natives” live in the world of cloud computing and “digital natives” grew up with technology, we also have “AI natives.” These are the individuals and organizations spearheading the AI revolution in the banking sector; they are AI professionals. With the introduction of generative AI, this change is now even more intense. 

1. Online and mobile banking: 

The banking experience has changed dramatically as a result of the rise of online and mobile banking, enhanced by AI. Customized financial advice, chatbot support, and user interface customization are all made possible by AI-driven personalization.

2. Customer Insights: 

Artificial intelligence (AI) powered customer relationship management (CRM) systems evaluate consumer data to provide tailored product suggestions, customer support, and marketing, enhancing customer satisfaction and retention while also increasing cross-selling income for banks. GenAI has demonstrated enormous promise in this field.

3. Payment Processing Systems: 

Artificial Intelligence plays a crucial role in payment processing systems by enabling voice-activated payments, optimizing routing for cost-effectiveness, and detecting fraudulent transactions instantly.

4. Cybersecurity and Data Protection: 

Robust cybersecurity solutions enabled by AI are being progressively embraced by banks, following closely behind the aforementioned three domains. Sophisticated intrusion detection systems and threat intelligence shield banks from online attacks, preserving private customer data and financial transactions.

5. Regulatory Technology (RegTech): 

Banks use AI-driven RegTech solutions extensively today to address complicated regulatory requirements for regulatory reporting, automated compliance processes, and adherence to changing financial rules.

6. Risk Management Tools: 

Modern risk management technologies are used by wholesale banks to identify, track, and reduce financial risks. This involves controlling market, credit, and interest rate risks in addition to the newly added ESG risk. To mitigate risk, sophisticated financial tools such as derivatives are employed. Through predictive analytics, scenario modeling, and stress testing, AI improves risk management for banks by assisting in the assessment, monitoring, and mitigation of complex financial risks.

7. Core Banking Systems: 

The essential component of retail banking technology is the core banking system. These software systems handle transactions, keep track of finances, and manage client accounts. These occur frequently on older technology stacks. In order to migrate these systems to the new tech stack more quickly, banks are now looking to incorporate GenAI. Additionally, they are processing transactions, keeping track of finances, and managing consumer account data more effectively by utilizing AI.

8. ATMs (Automated Teller Machines): 

Banks are currently investing in AI-enabled smart ATMs to offer highly customized services to their clients, such as facial recognition for safe cardless transactions and predictive cash withdrawals based on spending trends.

9. Trading and Investment Platforms: 

Wholesale banks trade on a number of different financial marketplaces. They are able to efficiently conduct large-scale deals thanks to sophisticated trading platforms and algorithmic trading tools. Trading strategy optimization is facilitated by real-time market data and analysis provided by AI-driven trading platforms.

10. Capital Market Infrastructure: 

Wholesale banks play a significant role in the capital markets by handling bond issues, taking part in initial public offers (IPOs), and supplying liquidity to the financial markets. Underwriting, settlements, and market-making all entail the use of technology. These systems are on the same legacy tech stack as key banking systems. In order to expedite their transition to the new tech stack and streamline the handling of complicated financial instruments, banks are currently investigating the use of AI in these systems.

LeackStat 2023