IBM Predicts Gen AI to Transform Banks by 2025
IBM's study reveals that generative AI will significantly boost financial performance in banking by 2025, with shifts from pilot programs to strategic implementations.
A modern illustration depicts a multi-story bank building surrounded by various financial activities and technology icons, emphasizing the integration of artificial intelligence in the banking and finance sector.
ARMONK, N.Y., Feb. 5, 2025 /CNW/ -- IBM (NYSE: IBM) unveils promising insights for the banking sector, predicting a major shift driven by Generative AI technology. The IBM Institute for Business Value's annual report envisions an industry pivot from experimental stages to full-fledged strategic executions aimed at enhancing financial performance.
The latest findings indicate that only 8% of banks engaged in systematic Generative AI development in 2024. However, this figure is set to rise dramatically as institutions refocus from isolated pilot projects to comprehensive strategic implementations. A significant 78% have employed a tactical adoption, but as banks expand service offerings, the move towards an agentic AI approach is gaining momentum.
Competitive landscapes in banking are transforming, as traditional convergence gives way to varied financial outcomes. As identified by the survey, banking CEOs recognize the necessity to embrace calculated risks to optimize automation benefits and fortify marketplace positions. Remarkably, 60% of these leaders are prepared to take these risks to stay ahead.
IBM's analysis suggests a budding comfort among over 16% of global customers with fully digital, branchless banks, anticipating a market shift from basic digital services to premium offerings like embedded finance and advisory roles tailored for affluent clients and SMEs. This transition underscores a shift in focus where banks offer more specialized, high-value services.
"The shift towards strategic, enterprise-wide deployment of Generative AI is redefining the banking industry," stated Shanker Ramamurthy, IBM Consulting's Global Managing Director of Banking & Financial Markets. "In 2025, financial entities are investing heavily in transformation initiatives aimed at improving customer experience and operational efficiencies, while minimizing risks and modernizing their IT frameworks."
The report delivers comprehensive insights, drawing data from key global markets including the US, UK, and China, offering financial institutions and partners a clearer understanding of evolving trends. For a detailed exploration of these insights, the full IBM report is available.
