AI Inequality: The New Divide in Banking’s Future
66% of banks are "slow starters" disproving AI hype.
The banking sector is on the brink of a future defined by 'AI inequality.'
Those with advanced AI capabilities will emerge as the new leaders, while others will struggle to survive. This will lead to a surge in buyouts becoming the norm.
This new survey shows how divided banks are over AI implementation, as have others before.
While some banks are well-positioned to become AI powerhouses and most bankers acknowledge AI’s importance, most struggle to figure out how to deal with AI and are “slow starters.”
See this prior survey that confirms these results:
Banks Are Taking The GenAI Revolution At Their Own Pace
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👉TAKEAWAYS
🔹 66% of banks are “slow starters” that have yet to make significant progress in executing their digital transformation strategies on any front.
🔹 29% of banks’ digital customer experience investment is on machine learning, AI and Gen AI on average.
🔹 32% of banking executives point to lack of budget as one of the biggest barriers to digital transformation.
🔹 35% of banking executives report having a fully agile operating model.
🔹 39% of Transformation Leaders prioritise cloud infrastructure or migration for transformation over the next three years.
🔹 33% of bank executives cite data and analytics to understand customers as the top area of focus.
🔹 42% of banks are implementing personalised customer journeys to improve customer experience.
👊STRAIGHT TALK👊
Once again, a survey shows the vast divide in AI adoption among banks.
Nearly a third of respondents point to a lack of budget as their biggest barrier to the digital transformation required for AI adoption.
Clearly, not all banks will benefit equally from AI adoption.
That’s why I use the term “AI inequality” to highlight one of the bigger problems banks will face in the next five years.
Banks that are “AI have-nots” without robust AI capabilities will be increasingly challenged to compete with banks that are “AI haves.”
Will banks bleed customers without AI?
We don’t know yet, but I believe they will.
Community and regional banks can make a strong case for surviving without advanced AI services, as their clients have geographic ties.
Mid- and large-tier banks will not be so fortunate, and if AI services become compelling, they will likely lose customers to more sophisticated rivals.
Ultimately, I can see banks that are AI have-nots being bought out by the AI haves in a vicious round of mergers.
What is clear is that AI hype that would have us believe the entire banking sector is transforming itself is far from reality.
What do you think?
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Fascinating subject; thanks for getting started on this.