Industry Leaders Weigh In: The Growing Impact of Generative AI in Banking
In this blog, we highlight some key research on GenAI published by Accenture and BCG, on how banks can implement GenAI for productivity gains and cost savings.
As a provider of generative AI solutions for banks, we frequently highlight the advantages of this technology, particularly its potential to enhance productivity and reduce costs.
For instance, our technology reduces the time spent on financial crime investigations from 3 hours to just 30 minutes. A tier-1 bank estimates that with Lucinity, they can reduce $100 million in costs annually due to increased productivity.
We appreciate the validation that comes from industry leaders like Accenture and BCG, whose analyses consistently recognize the impact of generative AI in the financial sector.
Two recent reports from these titans of consulting analyze the potential of generative AI in business, and they are insightful reads.
The first report, written by Accenture, recommends that banks should embrace generative AI and talks about some of the gains being made already by early adopters of the technology:
The study claims that banking has moved from the question of whether the technology will change banking, to where they should start and what the ultimate impact will be. “It’s not a matter of if, but how and how far”.
It also concluded that every role in every bank is likely to benefit in some way from generative AI.
In terms of financial benefits, the report claims that:
- 22% - 30%: Is the potential productivity improvement for early adopters of GenAI over the next three years, according to Accenture’s latest financial projections
- 600 bps (basis points): Is the potential rise in revenue growth
- 300 bps: Is the likely increase in return on equity
The report concludes by saying that 73% of the time spent by US bank employees has a high potential to be impacted by generative AI (39% by automation and 34% by augmentation.)
Meanwhile, over at BCG, they’ve been talking to over 1,400 C-Suite execs about the potential for generative AI to drive greater profits, and reveals that GenAI is quickly changing the way companies do business — with big gaps emerging between the winners and the observers.
BCG found that:
- 54% of leaders expect AI and GenAI to deliver cost savings in 2024. Of those, roughly half anticipate cost savings in excess of 10%.
- The winning firms recognize that the extraordinary opportunities for productivity gains—as well as topline growth—are within reach right now.
What I found particularly interesting was BCG’s list of five characteristics that they say set the winners apart from the observers:
- Investment in productivity and topline growth
- Systematic upskilling
- Vigilance about AI cost of use
- A focus on building strategic relationships
- Implementation of responsible AI principles
These are very similar themes to those we have been discussing with clients or prospective buyers over the last five years.
BCG’s survey of execs finds that those investing in AI now will make considerable cost savings and, like Lucinity, believes that these savings shouldn’t be banked but reinvested, creating “new revenue streams and driving further growth”.
To reap the rewards of AI, BCG’s report says that leading companies ensure teams know how to use it most effectively. We’ve already spoken at length about the potential for AI itself to upskill workers, and elevate them to higher level, providing more value to businesses.
BCG’s research shows that organizations whose CEOs participate in Responsible AI initiatives realize 58% more business benefits than those whose CEOs are uninvolved.
And from the start of our journey, Lucinity has always championed responsible AI, and adhered to an Ethical AI pledge, to make sure we use Artificial Intelligence in a way that empowers individuals, safeguards societies, and ensures integrity in the financial ecosystem. You can read it at: https://lucinity.com/ethical-ai-pledge
In short, we’ve been extolling the virtues of generative AI for some time now, and these reports underline many of the same benefits. It’s great to see the big consulting firms analysis match our own claims and predictions.
