Compared to 2024, more banks are expected to adopt generative AI this year, according to the IBM Institute for Business Value’s 2025 Outlook for Banking and Financial Markets.
IBM said that last year, just 8 percent of banks were developing GenAI systematically, while 78 percent took a tactical approach. This year, banks are transitioning from the pilot stage to execution, and more banks are incorporating agentic AI into their strategic approach to service expansion.
“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,” said Shanker Ramamurthy, IBM Consulting's global managing director banking and financial markets, in a statement.
Sixty percent of banking CEOs accept that they must take on risk while harnessing the benefits of automation and bolstering competitiveness. IBM indicated that business models and processes must be re-evaluated, and execution properly handled given that contrasting financial performance is getting ahead of steady banking convergence.
Moreover, banks compete through high-value services rather than mass-market digital offers, including embedded finance and advisory services to wealthy investors and small and medium-sized enterprises. Nonetheless, more than 16 percent of global clients are content with their primary banking relationship being with a branchless, fully digital bank.
“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,” Ramamurthy said.
The IBM Institute for Business Value’s 2025 Outlook for Banking and Financial Markets report examined industry C-suite leader sentiment, bank customer behaviour and economic data from the US, Canada, European Union, United Kingdom, Japan, China, India, and Japan.