Generative AI Expected to Drive 6% Revenue Growth for Banks

Ira Singh
Khabar Khabaron Ki,02 May’24

In a move set to redefine operational patterns within the banking sector, the incorporation of Generative Artificial Intelligence (GenAI) emerges as a pivotal strategy for banks worldwide to unlock unprecedented levels of employee productivity and revenue generation. A recent report compiled by leading IT company Accenture,in collaboration with AI research firms,suggests that banks worldwide could potentially increase their revenues by a remarkable 6% in the next three years.Banks which effectively adopt and scale generative AI could increase employee productivity by up to 30 per cent, streamlining numerous language- related tasks, revealed a latest report.

Generative AI, a subset of artificial intelligence, has garnered attention for its ability to generate synthetic data that closely mimics real-world scenarios. This capability opens up a plethora of opportunities for banks, ranging from personalized customer experiences to more robust risk management strategies.GenAI can play a pivotal role in enhancing revenue generation for banks. By analyzing vast datasets and identifying untapped opportunities ,GenAI empowers banks to tailor their products and services to better meet customer needs and preferences. This targeted approach not only strengthens customer engagement but also drives increased sales and revenue streams for the bank.

The leading IT firm, analysed publicly available employee data to estimate the impact of generative AI on banking tasks. The company modelled the financial implications for over 150 large banks globally, including Indian public and private sector banks, over a three-year period. “Banks that move quickly to scale generative AI across their organisations could increase their revenues by up to 600 bps (basis points) in three years,” the research revealed.

The industry experts reportedly stated that banks will need to optimise the usage of their generative AI applications and upskill existing employees while attracting specialized AI and data talent to support the scaling and operationalization of the technology.

One of the primary avenues through which banks can utilize the power of GenAI is in optimizing employee productivity. By automating repetitive tasks and providing intelligent insights, GenAI enables bank employees to focus their efforts on higher- value activities that require human expertise. This not only reduces manual workloads but also empowers employees to deliver more personalized and efficient service to customers.

Additionally, the report underscores the potential of GenAI in improving risk management practices within banks. By continuously generating and analyzing simulated data, GenAI enables banks to identify potential risks and opportunities in real-time, thereby minimizing financial losses and enhancing overall resilience.