Only 6% of Retail Banks Have a Plan to Drive AI-driven Transformation

Mumbai: While 80 per cent of retail bank executives believe that generative artificial intelligence (AI) represents a significant leap in advancing AI technology, only 6 per cent of the retail banks are ready with a roadmap for enterprise-wide AI-driven transformation at scale revealed the 20th anniversary edition of the Capgemini Research Institute’s World Retail Banking Report, published on Tuesday.

The study found most banks are ill-prepared to thrive in an intelligent banking future. “Globally, only 4 per cent of retail bank achieved a high score on business commitment and technology capabilities, while 41 per cent scored average, indicating a widespread lack of readiness to embrace and effectively implement intelligent transformation,” said the report.

Regional disparities further underscore this issue. In North America, 27 per cent of banks displayed low readiness, followed by Europe with 31 per cent, and Asia-Pacific (APAC) exhibiting a significant lag, with 48 per cent of banks scoring low. As a result of macroeconomic uncertainty, many retail banks are being forced to make strategic decisions to navigate challenges to their existing business models. Productivity and efficiency dominated the priority list of the bank leaders surveyed. When it comes to technology, 70 per cent of bank CXOs plan to increase investment in digital transformation by up to 10 per cent in 2024. Yet, the report finds that banks are not ready to embrace and scale intelligent transformation, which involves the strategic application of advanced technologies like AI, machine learning and gen AI to drive innovation and efficiencies.

The survey evaluated 250 retail banks across diverse business and technology parameters to understand their infrastructure data maturity and commitment to artificial intelligence.