Fewer than 1 in 4 banks ready for AI era

Editorial

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A report from Boston Consulting Group (BCG) found that almost all banks have invested in AI technology, yet less than 1 in 4 have progressed from pilots and proof of concepts to fully implement the technology into their daily operations. 

“The leap from predictive analytics to generative AI—and now to fully autonomous, agentic systems—is here,” states the report. “AI is no longer a fringe experiment; it’s the engine of next-generation banking. Customer interactions, loan approvals, fraud detection, even compliance monitoring: all are ripe for reinvention.”

Yet a recent BCG survey finds that only 25% of institutions have “woven these capabilities into their strategic playbook” states the report. “The other 75% remain stuck in siloed pilots and proofs of concept, risking irrelevance as digital-first competitors accelerate ahead. Most banks are deploying AI toward basic activities—not those that lead to transformation.” 

According to BCG, banks must move beyond pilots to redefine strategy, technology and governance – or “risk losing control of the financial landscape to faster movers”.

“Early movers will set the pace—and the terms—of AI competition,” states the report. “Lagging banks will find themselves racing to catch up under conditions they didn’t choose.”

The publication of the report comes at an important time for AI in financial services on both sides of the Atlantic. The EU’s AI Act came into force in August 2024. 

Meanwhile, the US largest bank, JP Morgan Chase, recently suggested it intends to ramp up its use of AI to increase efficiency while also calling for a slowdown in hiring. 

The bank’s CFO, Jeremy Barnum, told investors at a meeting in New York that recruitment is set to slow following the appointment of 60,000 people over the last five years, equivalent to a 23% increase in head count.

“We’re asking people to resist head count growth where possible and increase their focus on efficiency,” said Barnum, in comments reported by Business Insider.