Many of us have fond memories of a Family Feud host saying, “And the survey says…!” as the game show’s answer board lit up, bringing joy or disappointment to the contestants.
For some, the host who comes to mind is Richard Dawson or Ray Combs, while today’s fans likely think of Steve Harvey.
Similarly, as a former banker, I have memories (and firsthand knowledge) of how banking was done in the past. But today, banking is evolving at an entirely different pace – with a whole new set of tools. The latest tool in the modern banker’s toolbox is GenAI. How prevalent is GenAI in the banking industry? How does it influence current and future strategies?
Study shows a strong uptake of GenAI in banking
Just like on Family Feud, it’s time for the big reveal. SAS recently partnered with Coleman Parkes Research to survey 1,600 business leaders across 20 countries. Of those surveyed, 243 respondents were senior banking execs – the strategists and decision makers delivering on their organizations’ GenAI strategy.
The bankers’ survey responses formed the basis of our new report, Your journey to a GenAI future: A strategic path to success in banking. This report looks at how banks are implementing GenAI, including their biggest challenges and how banks’ use of GenAI compares to other industries, such as insurance, public sector and health care.
How GenAI is transforming banking
If Family Feud had a category for the top five industries adopting GenAI, I'd confidently place banking at the top – and I’d be right. Our survey results reveal that banking leads the pack with a 60% adoption rate. Banking is actually tied with insurance – a result that’s not surprising given their close connection.
Banking’s spending on GenAI is projected to reach nearly $85 billion by 2030, a remarkable 55.55% compound annual growth rate. This growth trajectory reflects AI's increasing significance as it reshapes the banking industry.
Banks use GenAI across the business to enhance customer experience, optimize operations and drive innovation. Compared with cross-industry averages, banks use GenAI at a higher rate in several areas, including:
- Marketing (47%).
- IT (39%).
- Sales (36%).
Interestingly, banking finance departments use GenAI at almost double the cross-industry average rate.
Banks’ biggest GenAI challenges may surprise you
GenAI hallucinations and bias have received considerable attention, and I would have guessed those would be the biggest challenges of GenAI adoption. But, our survey reveals that banking’s biggest challenges center on data privacy and security. Although the percentages are slightly lower than in other industries, data privacy and security still rank as banks’ top concerns, at 74% and 71%, respectively.
This finding highlights that reputational and operational risks related to data are at the top of banks' minds. Explainability and accuracy rank next at 55%, with governance and potential for bias further down the list.
Getting GenAI right pays off
McKinsey estimates GenAI could add between $200 billion and $340 billion in value annually for banks, or 2.8% - 4.7% of total industry revenues, largely through increased productivity. Considering those anticipated returns, how could banks not adopt GenAI?
With so much hype surrounding GenAI, the rubber meets the road when determining measurable outcomes. Where and how are banks injecting GenAI to drive these expected gains? Discussing the totality of AI applications, Gartner notes that "generative AI is 90 percent of the airwaves but only five percent of the use cases.”
While GenAI is definitely buzzworthy, our recent survey shows that banks are using it to deliver measurable outcomes through:
- Improved employee experience and satisfaction (90%).
- Delivering better risk management and compliance features (88%).
- Operational cost reduction and time saving (85%).
- Improved CSAT and retention (82%).
FOMO drives increase in banks’ GenAI investments
What's next for banks and GenAI? Even as banking AI use cases and metrics evolve, 87% of banks feel the very real fear of being left behind, indicating they intend to invest further in GenAI in the coming year.
Banking leaders are optimistic about GenAI's transformative potential, with 58% stating they believe its implementation will bring measurable improvements in predictive analytics accuracy – significantly more than any other industry surveyed. While most banking leaders focus on using AI and GenAI for practical solutions to business challenges with measurable outcomes, 56% also expect GenAI to drive innovation, and 54% see it as a tool to enhance customer engagement.
This is why the next frontier of AI and GenAI is agentic AI, which uses sophisticated reasoning and iterative planning to solve complex, multi-step problems autonomously. This enables always-on chatbots that provide seamless customer service around the clock.
Full survey report offers more insights
Although the hype around GenAI will eventually settle and specific use cases may evolve, one thing is certain – GenAI is already impacting banking and will continue to do so.
As contestants say on Family Feud, “Good answer, good answer!” I’ve only hit the highlights here, but there’s much more information in our GenAI banking report.
