Generative AI a growing priority for banks, with 1 in 5 launching apps

One in five banks globally have launched, or are about to launch, applications based on generative AI technology, with use cases ranging from training call center agents to detecting fraud.

About 20% of retail and commercial banks have rolled out generative AI (GenAI) solutions or are ready to launch them imminently, Igor Mikhalev, head of emerging technologies strategy at consultancy EY, told the Banking Renaissance conference at The Banking 50 HUB in Amsterdam on Feb. 8.

EY's research, based on responses from 151 retail and commercial lenders, found that 45% of banks are already investing in GenAI and that 29% of banks' innovation budgets are dedicated to it.

Use cases

Most retail banks globally are prioritizing use cases focused on customer experience, risk management and revenue generation, Mikhalev said. The key is identifying high-value, low-complexity tasks, and top uses include categorizing new customers, personalized product recommendations and real-time fraud detection, Mikhalev said.

Dutch lender ABN AMRO Bank NV is using GenAI in various ways to improve operations and client services, including in its customer contact centers, according to chief strategy and innovation officer Edwin van Bommel.

The technology transcribes customer calls in real time, meaning agents can more easily find the knowledge articles they need to help clients, van Bommel said at the conference.

It is also used to generate better data for training call center staff. Coaches can be told more precisely which elements of calls they should focus on, leading to improved call quality. GenAI is also being used to more effectively categorize customer calls based on the reason they are calling.

By the end of the current quarter, 75% of ABN Amro's call center agents will be enabled by these technologies, and in the second quarter, this will hopefully reach 100%, van Bommel said.

The bank is also using GenAI to create job descriptions and efficiently extract and organize data from disparate documents.

Decentralized rollout

ABN Amro is using a decentralized "hub and spoke" model to roll out GenAI technology, as it can be adopted across the bank, from front-end customer support to anti-money laundering controls.

"It's everywhere [and] will be integrated much more into other standard software, and we need to make sure all our technical teams and business people working with those teams ... understand the possibilities and also the limitations," van Bommel said.

As banks leverage the technology, the main suppliers of GenAI continue to ramp up investment, a study from S&P Global Market Intelligence 451 Research indicates.

Spending on servers and networks is booked as capital expenditure. Google LLC parent Alphabet Inc. is spending more than $11 billion on capex each quarter, about 50% more than before OpenAI LLC's ChatGPT was released in 2022. Microsoft Corp., OpenAI's largest investor, spent as much on capex in the most recent quarter as it did in the whole of its fiscal 2018.

451 Research is a technology research group within S&P Global Market Intelligence.