Introduction

In a dynamic banking environment, banks are seeking to differentiate themselves and gain a competitive advantage. Generative Artificial Intelligence (GenAI) is transforming the banking sector, providing innovative solutions that optimise efficiency, enhance security, and increase customer satisfaction.

As the banking industry increasingly moves towards digitisation, the adoption of advanced AI technologies becomes crucial. GenAI, with its ability to synthesise and generate content, offers unparalleled opportunities to automate complex processes, provide personalised customer experiences, and strengthen security measures.

Our latest 27th Annual CEO Survey indicated that leaders expect technology including GenAI and Machine Learning (ML) to be the centre of optimising costs, creating new revenue streams and improving the customer experience within their organisations. Middle East CEOs are also optimistic about the financial impact of GenAI, with 63% expecting the adoption of it in their organisation to increase revenue, while 62% said it would increase profitability. In the GCC, enthusiasm is even higher with two thirds expecting revenue increases and a similar number expecting profitability increases. While these statistics cover various industries, the banking sector specifically has been heavily reliant on technology since its inception.

Financial services CEOs in the region have acknowledged the necessity to evolve their business models to ensure sustainable outcomes for stakeholders and society, especially in the face of challenges, such as climate change and the rise of GenAI.

Findings of our 27th Annual CEO Survey: Financial Services findings have indicated that almost three-quarters of FS CEOs in the region (75%) expect GenAI to improve the quality of their products and services over the next year, significantly higher than 59% of global FS peers. An equally significant number of FS leaders in the region (69%) believe that GenAI will enhance their company’s ability to build trust with stakeholders, compared to less than half of their global peers (47%).

AI systems can generate content, predict outcomes, automate complex processes, and much more, potentially transforming how banks operate, engage with customers, and manage data. However, alongside these benefits come substantial cybersecurity risks that must be managed to protect sensitive financial information and maintain trust in banking institutions.

In this thought leadership report we will dive into the use cases of GenAI in banking, identify associated cybersecurity risks, and recommend measures to mitigate these risks.

How will GenAI affect your company this year?

Increase efficiencies in my employees’ time at work

68%

Increase revenue

63%

Increase profitability

62%

Increase efficiencies in my own time at work

50%

Q: To what extent will GenAI increase or decrease the following in your company in the next 12 months?
(Showing summary 'NET' Increase)
Source: PwC’s 27th Annual CEO Survey, base of 4,702, US base of 231

Personalisation and security: Use cases of GenAI in banking

GenAI is revolutionising the banking industry by enhancing operational efficiency and customer satisfaction. As the market moves toward cashless banking, GenAI introduces a unique opportunity for banks to explore untapped possibilities and overcome existing limitations.

Leveraging GenAI can enable banks to create personalised experiences for each customer while maintaining robust security systems. This tailored approach addresses logical hazards and minimises complications arising from traditional practices. In a competitive landscape, banks are constantly seeking to reduce costs, pioneer new products and services that gain customer support, and advance their market share.

Adopting GenAI will help banks realise these objectives through various use cases. In this report we touch base on these scenarios, their benefits and primary risks.

01

Streamlined loan and mortgage processing

02

Enhanced cybersecurity

03

Precise identity verification

04

Automated customer support and personalised banking services

05

Fraud detection and prevention

06

Risk management

Recommendations to mitigate risks

While GenAI offers several advantages for the banking and FinTech market, it also introduces risks that need to be effectively mitigated, which may have important implications for financial institutions.

GenAI: Balancing innovation, security, and customer-centricity

GenAI offers tremendous potential for enhancing efficiency, personalisation, and customer engagement in the banking sector. However, it also introduces new cybersecurity risks that must be carefully managed. To mitigate these risks, banks need to implement additional security measures, particularly in securing data, ensuring its accuracy and completeness, and maintaining service availability.

Additionally, the improved data analysis potential of GenAI allows banks better understanding of customer behaviour and market trends, unlocking hyper-personalised financial products and services and, ultimately, stronger customer relationships and loyalty. GenAI predictive insights enables early tracking of market changes, providing advance warning to banks over changes they can leverage before competitors discover emerging opportunities.

Also notable are the cybersecurity improvements GenAI is driving. With cyber threats maturing by the day, the ability of GenAI to detect and react almost instantly to these threats is priceless. As well as keeping valuable financial data safe, this will also help establish trust with customers who need to know that their information is in safe hands.

Through incremental development, the evolution of GenAI will pave the way for the most sophisticated applications in the banking sector. Integration with compatible up-and-coming technologies such as blockchain and Internet of Things (IoT) offers the potential to further expand the capabilities and benefits of GenAI. The banks that adopt these innovations will be best poised to take the lead in digital transformation and establish new benchmarks in efficiency, security, and customer experience for the industry.

Considering the pace at which emerging technologies and GenAI are expanding, banks should consider having the right partners and alliances that can support the implementation of GenAI within their environment while mitigating the risks arising from adopting such technologies.

Ultimately, the goal is to harness the power of GenAI responsibly, ensuring that innovation does not come at the cost of security and customer trust. By implementing mitigation strategies, financial organisations can balance leveraging the benefits of GenAI and maintaining robust cybersecurity measures. This approach will help safeguard customer data, maintain trust, and drive sustainable innovation in the digital banking landscape.

GenAI is a gamechanger for banking. It will significantly help make the overall financial services process more secure, efficient, and customer-friendly. As banks continue on this journey, they can look forward to a more innovative and resilient future, with GenAI as a core component of their digital strategy. This ongoing commitment to innovation will be crucial for staying ahead of the competition and meeting the evolving needs of clients in a digital-first world.