Generative AI is a game-changing technology that can create new content, data, and insights from existing information. It can help retail banks improve their efficiency, customer experience, and innovation. However, most banks are not ready to embrace and scale generative AI across their operations. This is the key finding of the World Retail Banking Report 2024, published by the Capgemini Research Institute.

The report surveyed more than 250 retail banking executives, 1,500 banking employees and 4,500 banking customers across 14 markets. It also analyzed the business and technology readiness of 250 retail banks to implement generative AI and intelligent transformation. The report reveals that only 6% of retail banks have a roadmap for enterprise-wide AI-driven transformation at scale, and only 4% are ready to take full advantage of generative AI.

The report warns that banks risk falling behind in the race to leverage generative AI, which can have a lighthouse effect when used responsibly and wisely across operations. Generative AI can help banks optimize their processes, enhance their customer service, and drive innovation. However, banks need to overcome the challenges of measuring the impact of generative AI, making it explainable and transparent, and building trust and customer intimacy.

Some of the key findings and recommendations of the report are:

• Generative AI can help banks optimize up to 66% of the time spent on operations, documentation, compliance, and other onboarding-related activities. Bank employees are most excited about generative AI copilots’ potential to automate fraud detection, data visualization and analytics, and personalized content creation.
• Generative AI can help banks create intelligent contact centers that leverage chatbots with conversational AI capabilities and intelligent copilots to assist agents in their day-to-day tasks. This can reduce customer dissatisfaction and call abandonment, which are on the rise due to the limitations of traditional rule-based chatbots.
• Generative AI can help banks innovate and differentiate themselves in the market by creating new products, services, and experiences for their customers. For example, generative AI can help banks generate personalized financial advice, tailor-made offers, and customized loyalty programs.
• Banks need to develop a roadmap that balances hype with a pragmatic, traceable and measurable approach to generative AI. They need to establish key performance indicators (KPIs) to track, monitor, and report the real impact of generative AI when implemented at scale. They also need to set up an AI observatory to avoid generative AI silent failure, which occurs when banks fail to realize the suboptimal results and outcomes of their generative AI experiments.
• Banks need to make generative AI explainable and appropriately transparent to ensure compliance, accountability, and trust. They need to adopt ethical principles and frameworks to guide the development and deployment of generative AI. They also need to educate and empower their customers and employees to understand and use generative AI effectively.

The World Retail Banking Report 2024 provides a comprehensive and insightful analysis of the current state and future potential of generative AI in retail banking. It also offers practical guidance and best practices for banks to successfully adopt and scale generative AI across their operations. The report is based on Capgemini’s proprietary market-sizing model, as well as interviews with Capgemini’s partners including Microsoft, Salesforce and Temenos.