Big banking looks up to GenAI launching its own LLMs

Financial giants are leveraging GenAI to enhance customer service, streamline operations, and bolster fraud detection. This shift promises increased efficiency and cost savings, with potential annual revenue boosts. The banking sector is set to increase spending on Generative AI, as per Juniper Research, it’ll be US$85 B in 2030, from US$6 B globally in 2024, as banks seek to scale AI to revolutionise business models. Leading banks are expected to adopt Gen AI services to offer more personalized user experiences, enabling banks to provide increasingly compelling services at reduced cost. 

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Gen AI is expected to enable drastic change at banks by providing personalized spending insights and easier access to customer trends. Banks will increasingly shift to an AI-centric strategy, as these business models are essential to competing effectively in a highly dynamic banking environment.

Banks must understand that investment has now become vital to GenAI, as this can ensure that banks have enough time to build the highest-value use cases, such as GenAI’s use within customer services and back-office roles. This investment will enable banks to gain a competitive advantage, as their costs reduce and user expectations around experience shift.

“Using AI at the heart of operations will enable banks to provide a differentiated and personalized user experience, while reducing costs. By not making AI a priority today, banks risk losing ground to competitors.” — Nick Maynard

Research co-author Nick Maynard explained, “Using AI at the heart of operations will enable banks to provide a differentiated and personalized user experience, while reducing costs. By not making AI a priority today, banks risk losing ground to competitors.”

Financial services have been keen on using AI for fraud detection and money-laundering after OpenAI launched ChatGPT in late 2022. This boom in AI will likely make banks depend even more on big US tech firms, creating new risks for the industry, a concern European banking executives have expressed.

It’s no wonder that big banks are launching their own LLMs. JP Morgan launched an AI chatbot called Omni AI which will function as a research analyst. The need stems from the fact that its employees are forbidden to use consumer AI chatbots like OpenAI’s ChatGPT, Anthropic’s Claude, or Google’s Gemini.

Goldman Sachs has introduced its first GenAI tool to developers across the company. Citigroup used GenAI to review 1,089 pages of new capital rules for the US banking sector released by federal regulators.

Wells Fargo integrated generative AI into its virtual assistant, called ‘Fargo’, to enhance customer interactions. In fact, this virtual assistant app is on track to hit 100 M customer interactions in its first year as the bank aggressively embraces GenAI.

Morgan Stanley also recently launched its second Gen AI application for financial advisers, going for in-house solutions instead of pre-built tools from AI startups. 

While big banks embrace Gen AI, the adoption of LLMs also brings challenges, including data privacy concerns and the need for robust regulatory frameworks. As banks navigate this new landscape, the balance between innovation and risk management will be crucial.