Banks are increasingly turning to AI as they look to gain an edge over their competition. In fact, over 80 percent of banks with more than $150 billion in assets have explored use of technology, and experts predict banks will invest more than $57 billion in AI over the next three years.
Growth in financial institutions’ (FIs) investment in AI comes as banks look to streamline their operational costs. A recent study estimated that investment in AI could result in a 22 percent reduction in operational costs at FIs, collectively saving them as much as $1 trillion by 2030.
In the July edition of the Digital Banking Tracker, PYMNTS explores the latest AI developments from around the space and the potential AI holds for the future.
One recent AI rollout seems to be winning over customers by the thousands — or even a whole million.
Bank of America recently announced that it surpassed 1 million users of its new AI-enabled mobile chatbot, Erica. The virtual financial assistant seems to be particularly gaining traction among customers who are in search of financial advice or have questions about their accounts.
Meanwhile, others in the space are turning to partnerships and acquisitions to raise their innovation game. Banking solution provider Finastra recently announced it would acquire FinTech solution provider Malauzai Software for an undisclosed price. According to a Finastra press release, the move is designed as part of its efforts to help community banks, credit unions and other smaller FIs enable digital banking capabilities for their customers.
Similarly, Australian FinTech Verrency recently agreed to a long-term partnership deal with fellow Australian financial solution provider, volt, to provide the latter with a cloud-based digital payments platform.
To read more on these stories and the rest of the latest Digital Banking headlines, check out the Tracker’s News and Trends section.
One bank embracing AI to boost its roster of financial service products and features is State Street. The company is currently working to introduce a range of AI use cases as part of its long-term digital transformation plan, called Project Beacon.
In a recent interview with PYMNTS for the latest Digital Banking Tracker feature story, Moiz Kohari, senior vice president and global chief technology architect at State Street, said “almost every business unit,” in the company is looking to leverage the technology to boost efficiencies and offer new capabilities. Kohari said he believes AI will change nearly every area of the banking industry, and predicts that those who haven’t begun rolling out AI-powered products and features risk falling behind their competition.
“I think most banks, at one level or another, are already leveraging certain types of [AI and ML] capabilities,” he said. “And it’s something that, eventually, I think every financial institution is going to be leveraging at some level or another. It’s very difficult for me to think that this isn’t going to eventually impact every player in the marketplace.”
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About the Tracker
The Digital Banking Tracker™, powered by Feedzai, brings the latest news, research and expert commentary from the FinTech and consumer banking space, along with rankings of over 300 companies serving or powering the digital banking sector.