AI-Powered Future: Banks Can Unlock 6% Revenue Growth with Generative AI

Generative AI can boost bank revenues by 600 basis points in three years, according to Accenture. It can increase employee productivity by 30%, streamline language-related tasks, and reduce cost-to-income ratios by 400 basis points. Indian banks need to adopt a holistic approach for effective integration and upskill existing employees to unlock the full potential of generative AI in the banking sector.

Banks can significantly increase employee productivity and revenues by incorporating generative AI (GenAI) in their operations, according to a report by IT company Accenture.

Accenture analysed publicly available employee data to estimate the impact of generative AI on banking tasks. The company modelled the financial implications for over 150 large banks globally, including Indian public and private sector banks, over a three-year period.

''Banks that move quickly to scale generative AI across their organisations could increase their revenues by up to 600 bps (basis points) in three years,'' the research revealed.

Banks which effectively adopt and scale generative AI could increase employee productivity by up to 30 per cent by streamlining numerous language-related tasks, it said.

''Operating income could increase by around 20 per cent, while return on equity levels could rise by 300 bps...By helping banks operate more efficiently, the technology could lead to 1-2 per cent in cost savings, with cost-to-income ratios declining by up to 400 bps,'' the study further said.

Accenture said banks will need to optimise the usage of their generative AI applications and upskill existing employees while attracting specialized AI and data talent to support the scaling and operationalization of the technology.

It said 41 per cent of all banking occupation have a high potential for automation.

''To unlock generative AI's full potential, banks in India need to adopt a holistic and long-term strategy such that it integrates into their value chains. This will require reimagining traditional processes keeping AI at the core and building a robust foundation of data and digital powered by cloud,'' Manoj Singodia, MD and Lead-Financial Services, Accenture in India, said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)