Generative AI expected to drive significant disruption across the financial services industry

Per latest GlobalData estimates, the AI market was valued at $81 billion in 2022, and is expected to achieve a CAGR of more than 35% between 2022 and 2030. Artificial intelligence is reported by executives across all industries (and all FS sub-segments), as likely to drive “significant disruption” next 12-24 months out, and that “significant disruption” has already occurred (within the past 12-24 months). Gen AI, a specific sub-set of AI, is expected to drive even greater disruption. Gen AI is being experimented with by many leading incumbent banks, new entrants and technology vendors but concerns around data privacy and hallucinations drive caution. More human-like chat bots, and synthetic data for fraud and cyber resilience, are leading possible use cases. However, currently Gen AI is virtually non-existent in terms of “live” customer facing propositions. Chatbots, perhaps the most compelling near-term use case, remain completely untouched by even the pioneers in the field. While the benefits are clear long-term, short-term the risks are even clearer, whether that’s inaccurate guidance or advice in a heavily regulated arena, data leakage, fraud and cyber vulnerabilities, and so on. As such, risk management features prominently in the calculations. However, the fear of missing out is palpable. Incumbents need clear policies to help identify those most promising, early Gen AI use cases, then rapidly deploy them across the enterprise.