Banks See Many Obstacles in Digital Transformation

According to a new study on the use of artificial intelligence (AI) in banking, this area continues to be seen as crucial for maintaining competitiveness and delivering new services and products to customers.

The banking sector is undergoing a significant shift toward AI-driven solutions. This is the conclusion of the Global Banking Benchmark Study conducted by the consulting firm «Publicis Sapient», which surveyed 1,000 executives from large banks in 13 countries.

The study shows that banks worldwide are increasingly investing in AI technologies. Machine learning, AI, and generative AI account for 32 percent of the budgets allocated for transforming customer experiences.

Tight Budgets

However, critical obstacles to digital transformation remain. 32 percent of executives stated that budget constraints are a major issue.

Moreover, the agility of the own institutions is often met with skepticism. Contributing factors include growing regulatory demands and reliance on legacy systems. Only 35 percent of the executives believe that their company operates with a fully agile model.

Fewer Banks Are Seen as Transformation Leaders

The study categorizes the surveyed banks into four groups, based on how advanced they are in customer leadership and operational leadership. This year, only 11 percent were classified as «Transformation Leader» down from 22 percent in the previous 2022 survey. In contrast, the proportion of «Slow Starter» increased to 66 percent, up from 57 percent in 2022.

The gap between leaders and slow starters is significant. The leaders not only invest more but also focus on building the necessary foundations to better harness the advantages of AI.

The top priority for respondents is using data and analytics to better understand customers and their relationship with the bank.

Efficiency Trough Innovation

This highlights a clear trend toward more personalized services, data-driven decision-making, and agile processes that enable banks to innovate more quickly and operate more efficiently in a rapidly changing market.

«Artificial intelligence is revolutionizing the banking industry by driving not only efficiency and personalization but also new ways of risk assessment and fraud prevention,» said Alexander Schroff from Publicis Sapient. «The effectiveness of AI depends on the quality of the data processed and the expertise in handling the technology. Data integration provides deeper insights into customer behavior and the development of innovative products.»

The survey was conducted between February and April 2024.