The proliferation of artificial intelligence (AI) has provided banks with a multitude of benefits through its automation capabilities, such as efficiency gains, cost savings, and a drive for innovation and product development. According to new research from Omdia, the leading use case for AI in terms of software revenue is virtual assistants, which are projected to generate more than $2.7 billion for IT providers by 2028.
Omdia’s AI in Financial Services (FS) report finds that virtual assistants are the most prevalent use case, used primarily for internal purposes. However, this trend is expected to change, with nearly half of retail banks saying their top customer service priority is providing more consistent and sophisticated interaction with their contact centers.
“While many banks are striving to pioneer the launch of generative AI (GenAI)-based virtual assistants as a tool to attract new customers, there is a danger that it could alienate existing customers if not executed effectively,” says Philip Benton, principal financial services analyst at Omdia.
Other uses of AI in the sector
Fraud detection and mitigation stand out as another major use case for AI in financial services, especially as fraudsters increasingly leverage AI to exploit weaknesses within internal bank fraud controls. However, banks are also adopting AI to combat fraud. Omdia expects fraud management to remain a core use case for predictive AI, rather than GenAI. Omdia forecasts that AI software revenue for fraud detection and mitigation will reach $1.1 billion in 2028, with a CAGR of 16% between 2023 and 2028.
Wealth management firms are also implementing generative AI to improve client service and efficiency. This technology will help wealth managers streamline internal searches and develop research relevant to specific client requirements. Andrew Brosnan, Omdia principal analyst for AI in healthcare and financial services, noted that “financial institutions are now deploying AI internally to assist investment research, market analysis, and portfolio construction and rebalancing.”
