The banking industry finds itself in the midst of a technological revolution driven by artificial intelligence (AI). As “digital natives” grew up with the internet and “cloud natives” inhabit a world of cloud computing, “AI natives” are now emerging—individuals and institutions with expertise in applying AI technologies. For banks, integrating AI promises improved efficiency, risk management, customer service and more. Yet fully unlocking its potential requires a deeper transformation.

According to Verified Market Research, the global AI in the banking market could reach $64 billion by 2030, growing at around 30% annually. Banks have already employed AI-powered tools for various functions: personalizing customer interfaces, providing financial advice, detecting fraud, meeting regulatory requirements, and processing transactions. AI strengthens cybersecurity, enables voice-activated payments, and helps model complex instruments like derivatives to assess risk exposures.

Customer relationship management presents rich opportunities to analyze data for personalized marketing and product recommendations. Generative AI can further enhance customer insights. Lloyds Bank, for example, has adopted AI solutions to pinpoint identity fraud, while Deutsche Bank intends to use generative models to assist financial analysts.  

Payments are another area seeing AI innovation, from detecting fraudulent transfers to optimizing routing and cost efficiency. Major institutions like SWIFT are building AI capabilities specifically to transform cross-border payments. Regulatory technology (“RegTech”) powered by AI is growing fast too as banks automate compliance. RegTech revenue could exceed $44 billion globally by 2030.

Legacy core banking systems are prime targets for renewal with AI, improving how banks maintain records, manage accounts, and process transactions. UK bank Absa seeks better conversational AI for customer service, while core banking supplier Temenos has embedded analytical tools for recommended actions. The decades-old infrastructure supporting capital markets functions is similarly ripe for AI modernization. This will streamline activities like IPOs, bond issuances, and market making.  

To fully unlock AI’s potential, the banking industry must anchor cutting-edge technologies in strong cybersecurity, data, and cloud capabilities. However, adopting AI is not simply about bolting on tools; it requires a deeper DNA-level reconfiguration. Banks must foster company-wide cultures that view AI as an integral strategy rather than an add-on. 

Those that successfully harness AI, like CSM’s AI-driven automation services, will gain a competitive edge. But no single institution can address AI’s complex challenges alone. The path forward entails collaborative efforts between banks, regulators, and technology partners. With a robust framework in place, AI may usher in a new era of efficiency, personalization, and value for account holders worldwide.