AI Adoption Matures as Banks Transform Customer Experience and Drive New Business Models, Finds Report for Temenos

GENEVA, Switzerland – MARCH 10, 2022 – Temenos (SIX: TEMN), the cloud banking platform, today published a report with the Economist Intelligence Unit, “Banking on a game-changer: AI in financial services”. The report finds that the adoption of artificial intelligence (AI) technology is maturing as banks implement it across a range of innovative use cases. But banks are treading carefully, balancing business benefits against regulatory complexity and the need to maintain customers’ trust.

Key findings from the report include:

• 81% of banking IT executives agree that unlocking value from AI will separate winners from losers
• 78% report that incorporating AI into their organization’s products and services will help them achieve their business priorities, 46% say to a great extent
• 62% agree that the complexity and risks associated with handling personal data for AI projects often outweigh the benefits to customer experience
• Banks most heavily use AI in fraud detection (58% use AI heavily and a further 32% use it to at least some extent)

Bankers in the survey identified privacy and security concerns as the most prominent barrier to adopting and incorporating AI technologies. This was particularly pertinent for smaller organizations—those whose parent company’s assets are below US$10bn. Conversely, larger banks are more likely to struggle with regulatory compliance, complexity or uncertainty, or limitations of technology infrastructure.

As a numbers-based, data-driven industry, the banking sector has provided fertile soil for artificial intelligence (AI). As in other sectors, banks have initially found low-risk and incremental benefits in using AI to automate routine tasks. The report finds transformational opportunities for product innovation and new business models are also emerging, making AI a game-changer for banks.

Hani Hagras, Chief Science Officer, Temenos, said:

According to the report, almost all banks currently use AI to some extent or plan to in the next three years, across practically all business areas, from operations to customer experience. Top areas for future growth include personalizing investments (17% plan to adopt in next 1-3 years), credit scoring (15%), and portfolio optimization (13%).

91%

of US banks use AI for fraud detection

88%

of European execs have a clear strategy to adopt AI to develop new products and services

50%

of APAC IT execs cited privacy and security concerns as a barrier to bank adoption

84%

of LatAm IT execs believe AI will help achieve their bank’s top business priorities