How are banks using AI in 2024?
Artificial intelligence was one of the biggest trends for banks in 2023, and this is set to continue in 2024 as the hype around generative AI continues. Below are just some examples of how major banks worldwide are using and exploring AI technologies in 2024.
Banks continue to research and develop AI-powered solutions to prevent fraudulent transactions, improve customer experiences and increase productivity. Some have partnered with AI companies to piggyback off their technology, while others have invested heavily into their own R&D in the space.
From a payments perspective, tackling fraud has been a particularly important use case for AI and banks have already seen the benefits. J.P. Morgan, for example, reported in November that after using AI-powered large language models for payment screening, it had cut account validation rejection rates by 15-20%. Having said this, generative AI will continue to be a hot topic for banking in 2024 – driven by the ongoing prominence of ChatGPT – and this year could see a continued shift in focus towards boosting efficiency and providing better customer experiences.
Last year, Morgan Stanley released an AI-powered assistant – developed alongside ChatGPT creators OpenAI – that allows financial advisors to quickly access information across 100,000 reports and documents, meaning they can answer client requests faster. Meanwhile, Goldman Sachs and Westpac are using generative AI to help developers automatically generate lines of code – the latter claimed that software engineers aided by generative AI saw a 46% productivity increase during a recent experiment.
The technology is also being considered for customer-facing products, usually in the form of chatbots. J.P. Morgan has been developing an assistant that could use AI to select potential investments for its customers, while NatWest has already added generative AI capabilities to its Cora chatbot to make its interactions with customers seem more human-like.
Amidst the growing use of AI technologies, there have been calls for greater regulation to fend off concerns such as misinformation, the misuse of customer data and the potential for bias, which could have extremely damaging consequences for banks. Generative AI projects are still in their early stages, and it’s likely that collaboration with regulators will be vital going forward to ensure that banks are able to innovate while also making sure that customers aren’t being misled and data is being used correctly.
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