According to a research report by Bank of America (BAC), artificial intelligence (AI) technology has the potential to revolutionize the banking industry. The first and most significant application of AI technology in banks is likely to be automation, which can improve productivity and increase returns. However, there are also risks associated with the widespread use of AI in banks, including access to sensitive data and potential security threats.
The report highlights the need for ongoing dialogue between industry leaders and regulators to address these issues and ensure that banks are comfortable with the risks associated with institutionalizing AI technology. In addition, concerns about customer asset security and safeguarding them in a world where democratized AI has lowered barriers for threat actors must be addressed.
While big banks are already cautiously using AI, if it can deliver tangible efficiencies to European banks and increase yields, there will be recognition with more stable credit ratings and safe spreads. However, BAC notes that revenue growth from the use of AI technology is “less tangible” at this stage. Overall, while there are risks associated with the use of AI in banking, if implemented correctly, it has the potential to transform the industry and provide significant benefits for both banks and customers alike.