Investments in Generative AI (GenAI) has exploded. According to researchers at CB Insights, funding for AI startups jumped 5X in 2023, going up from $4.3 billion across 257 deals to $21.8 billion across 426 deals compared to the previous year.
Financial services will be a significant beneficiary of GenAI. According to McKinsey, GenAI could add the equivalent of $2.6 trillion to $4.4 trillion in value to the industry.
The McKinsey report says banking has the potential to unlock new value of between $200 billion and $340 billion across all segments and functions of the industry.
The banking and finance industry is in the top 10 segments for filing GenAI patents. These patents will result in new products and services, dramatically reshaping the industry.
From a strategic perspective, GenAI is quickly moving toward center stage in the end-to-end transformation of financial services.
The technology will enable users to automate tasks such as cheque processing and new product development. In the next 12 to 18 months, most of the industry will focus on three critical areas.
The first step to driving revenue is personalization. Today’s GenAI models and tools can quickly provide customers with personalized messaging and offers driven through channels.
GenAI can analyze thousands of industry reports, company filings, policy reports, social media streams, podcasts and customer interactions across channels.
Large Language Models (LLMs) used in GenAI can make complex enterprise data accessible using natural language processing (NLP). This ensures executives have instant and easy access to information and insights from across the enterprise, along with recommendations and decision support.
GenAI is increasingly being deployed in the regulatory and compliance landscape necessitated by the increasing regulatory headwinds.