By Mark Micallef, Managing Director, Southeast Asia, Google Cloud
Generative AI (gen AI) is rapidly transforming the financial services landscape. What began with experimental projects in 2024 is now gaining serious momentum, with many institutions moving gen AI into full-scale production and seeing tangible results from their investments.
2025 will serve as an industry tipping point for AI innovation with gen AI deployments at scale across the sector. This shift comes at a crucial juncture, as the industry grapples with challenges like an increasingly competitive environment, talent shortages, and rising customer expectations. By embracing gen AI, financial institutions can address these challenges head-on and enable new levels of efficiency, security, and customer satisfaction.
Let's dive into four trends that will drive gen AI adoption in banking throughout 2025:
1. Intuitive search that supercharges productivity
Gen AI will redefine knowledge management within financial institutions. Currently, many organizations struggle to extract meaningful insights from their vast data stores without significant manual intervention. For example, market analysts, compliance officers, and other professionals often spend significant time and effort sifting through information dispersed across documents and departments.In 2025, AI-powered search with advanced summarization capabilities will allow employees to find and analyze information faster and more effectively. Instead of data wrangling, they can focus on higher-order analysis and decision-making.
Such tools will provide instant access to essential insights, streamline workflows, and improve productivity. While subject matter experts will still play a crucial role in validating and interpreting information, new search capabilities will enable them to spend less time gathering data and more time deriving value from it.
2. The emergence of AI agents
AI agents are no longer a figment of the imagination; they are becoming a reality in the financial world. These digital assistants are poised to support many routine tasks, such as underwriting loans, adjusting claims, and generating risk reports. This will not only boost efficiency but also free employees to focus on more complex and strategic work, adding value where only human expertise can.
Moreover, AI agents will play a key role in driving revenue growth. By analyzing vast amounts of data, AI can build a deep understanding of each customer's financial situation, goals, and preferences. This understanding will enable banks to deliver hyper-personalized experiences, including tailored product recommendations, proactive financial advice, and even anticipate future customer needs. The experience would extend across all customer touchpoints, creating truly personalized and connected omnichannel banking.
3. Multimodal AI that elevates customer service
While banking apps have become increasingly feature-rich, they can also be complex to navigate. AI has the potential to simplify the user experience, and multimodal AI takes this to the next level. By simultaneously processing diverse data types like text, images, and audio, multimodal AI can understand the nuances of human communication, leading to more personalized and intuitive customer experiences.
Current natural language interfaces allow for more human-like interactions with banking apps, but they often struggle with complex inquiries. Now, imagine being able to ask your banking app, "How much did I spend dining out last month?" Multimodal AI, by analyzing transaction data and even recognizing images of receipts, can quickly identify and provide the answer. This seamless integration of information and intuitive understanding of customer requests is the future that multimodal AI offers the banking industry.
4. AI as crucial defense against fraud
The threat landscape is constantly evolving, with malicious actors leveraging gen AI to develop new attacks and exploit vulnerabilities in banking systems. But financial institutions are fighting back with their own AI-powered defenses. Our recent ROI of Gen AI research found that 3 in 5 financial institutions are seeing measurable improvement in their cybersecurity posture by using gen AI.
Fraudsters often rely on unstructured data sources like forged documents or suspicious online activity, which are extremely difficult to monitor manually. At the same time, security teams are being overwhelmed by the extensive volume of alerts generated by traditional fraud monitoring systems. AI's ability to analyze unstructured data, identify complex patterns, and prioritize alerts can significantly enhance fraud detection and protect customers against emerging threats.
This AI-driven vigilance will help financial services institutions stay ahead, turning a potential vulnerability into a strength as they actively counter AI-powered fraud with equally advanced defenses.
The foundation for success: data
The success of any AI initiative ultimately hinges on the quality and availability of data. Banks that have invested in robust data platforms will be best positioned to reap the benefits of AI. These platforms enable the aggregation of data from diverse sources, ensuring its quality and accessibility for AI applications. In the rapidly evolving world of financial services, the ability to effectively innovate with and harness gen AI will be a key differentiator between those who thrive and those who fall behind.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.
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