AI Technology to Transform Global banking, Promoting profits By CIOTechOutlook Team

AI Technology to Transform Global banking, Promoting profits

CIOTechOutlook Team | Monday, 24 June 2024, 02:42 IST

Artificial intelligence (AI) is emerging as a critical force poised to alter the global banking sector, potentially increasing earnings by USD 170 billion or 9% by 2028, as per CITI analysis.

AI's disruptive impact on finance, dubbed the General-Purpose Technology (GPT) of the 2020s-2030s, is expected to change operations, improve security measures, and redefine intellectual property landscapes around the world.

One of the most interesting features of the paper is its focus on AI's potential in combating financial fraud. AI-generated insights hold the key to combating real-time payment schemes, such as the common Authorized Push Payment (APP) fraud.

In the UK alone, APP fraud accounts for 40% of banking fraud losses, with anticipated expenses of USD 5.25 billion across the US, UK, and India by 2026 if unchecked. While the European Union, China, and Singapore have emerged as early adopters of AI regulation in finance, the United States has been conservative, falling behind in regulatory attempts.

India, on the other hand, has taken a varying position on AI governance. Initially taking a non-regulatory stance in early 2023, India quickly shifted to proposing complete AI legislation by mid-2024, albeit amid changing directions and advice.

In terms of economic impact, AI technology offers significant advances in developer productivity, potentially increasing efficiency by 10-50% and resulting in yearly savings of USD 2 to USD 16 billion in the US banking sector alone.