Generative AI to become a game-changer in financial services

• While obstacles like data protection and regulatory adherence remain, they’re not poised to stall the swift advance of this technology in financial services.
• Forging strategic alliances can be a pathway to harness the transformative potential of genAI, GlobalData says.

Generative AI (genAI) is quickly becoming a game-changer in the financial services sector in generating customised content and solutions are redefining how financial institutions interact with their customers and optimising their internal operations.

With the growing demand for personalised financial solutions, Kiran Raj, Practice Head of Disruptive Tech at GlobalData, said that genAI has a pivotal role in curating bespoke customer experiences.

“It is not about generic financial products anymore but crafting individualised strategies that align with each customer’s financial goals.”

Traditional banks such as JPMorgan and HSBC have already developed genAI-based tools that offer personalised financial advice to their customers.

Create predictive models

On the other hand, emerging fintechs such as Stripe and Cowbell are enhancing their end-user experience with genAI-powered tools.

 “Harnessing the power of genAI to analyse intricate patterns in transaction histories and financial behaviours can create predictive models that not only anticipate customer needs but also craft targeted financial products and advisories. This has the potential to elevate customer service, optimise costs, and enhance overall user satisfaction.” Saurabh Daga, Associate Project Manager of Disruptive Tech at GlobalData, said.

Synthetic data is being used by financial service providers such as Provinzial Insurance and Wells Fargo to create predictive models to detect fraud as well as develop personalised offerings.

Deutsche Bank and Goldman Sachs are experimenting with genAI to automate some of their backend processes including banking software development and management of financial documents.

Daga said that implementing genAI in the sensitive landscape of financial services comes with its set of challenges.

“Issues surrounding data accuracy, ethical considerations, and privacy are paramount. However, with judicious governance, these hurdles can be surpassed. Forging strategic alliances can be a pathway to harness the transformative potential of genAI, ensuring they are equipped with the right technology, infrastructure, and talent to capitalise on this wave of innovation.”

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