IBM Predicts Transformative Impact of Generative AI on Banking in 2025
IBM has unveiled its 2025 Outlook for Banking and Financial Markets, shedding light on the evolving landscape of the banking sector, as highlighted in Fintech Global News. This annual forecast, published by the IBM Institute for Business Value, highlights the profound impact generative AI and emerging technologies will have on financial institutions worldwide.
According to the study, generative AI is set for widespread adoption across the banking industry. While only 8% of banks had implemented the technology systematically last year, a staggering 78% are now integrating it in a more strategic and tactical manner. This shift signifies a transition from experimental pilot programs to full-scale deployment, underlining a broader movement towards agentic AI. As banks refine their service offerings, this new approach is expected to redefine customer interactions and operational efficiencies.
The report also notes an increasing divide in financial performance among banks as they restructure their business models. Successful execution of these new strategies will determine the industry’s leaders, distinguishing them from competitors who fail to adapt.
Additionally, 60% of surveyed banking CEOs recognize the importance of embracing automation-related risks to maintain a competitive edge. The integration of AI-driven automation is seen as crucial for optimizing operational processes, enhancing customer service, and strengthening risk management frameworks.
Consumer preferences are also shifting toward digital banking solutions, with over 16% of global clients now favoring a fully digital-first banking experience. This trend signals a transition from conventional digital services to more advanced offerings, such as embedded finance solutions and tailored advisory services for high-net-worth individuals and small-to-medium enterprises.
Commenting on the findings, Shanker Ramamurthy, IBM Consulting’s Global Managing Director for Banking & Financial Markets, stated: “We are seeing a significant shift in how generative AI is being deployed across the banking industry as institutions shift from broad experimentation to a strategic enterprise approach that prioritizes targeted applications of this powerful technology. As banks and other financial institutions around the world gear up for a pivotal year of investing in transformation, technology, and talent, we anticipate their efforts coalescing around initiatives using generative AI to level up customer experience, boost operational efficiency, reduce risks and modernize IT infrastructure.”
IBM’s report is based on insights from C-suite executives, bank customer behavior trends, and economic data spanning key global markets, including the United States, Canada, the European Union, the United Kingdom, Japan, China, and India. The study provides valuable guidance for financial institutions navigating the dynamic shifts in the banking landscape.