Gartner® innovation insights: What Banking CIOs Need To Know About Generative AI

Keeping up with GenAI: Gartner insights for banking CIOs

According to the 2024 Gartner® CIO and Technology Executive Survey, "80% of banking CIOs plan to increase investments in Al/machine learning (ML), including GenAl, in 2024 compared to the prior year."

Gartner in the Innovation Insights: What Banking CIOs Need To Know About Generative AI report, highlights that "Generative AI brings tremendous opportunities for banking". However we believe Gartner underlines that one must be cautious of the risks it also entitles. In this research by Gartner, there is an overview of the more prevalent GenAI applications while accounting for their risks and benefits.

For now, most of the current use cases are internally focused as banking leaders assess the benefits and risks of GenAl before scaling its capabilities for wider customer-facing adoption. Eventually, the use cases will start to appear in consumer-facing tools. 

How to deploy GenAI to create business value

Gartner highlights that "Banks are currently prioritizing the adoption of GenAI for more internal applications as opposed to customer-facing use cases, as they try to understand its full potential — benefits, as well as risks."

We believe, Gartner recommends 4 aspects that banking CIOs should focus on when deploying GenAI to create business value:

1. Harness use cases

Gartner in the report seems to highlight that financial institutions can "Fast track the GenAI journey by selecting use cases such as fraud prevention that provide real benefits to the business while equally considering their feasibility and internal- and external-market readiness."

2. Update your digital strategy

Gartner highlights the importance for financial institutions should "update [their] digital strategy by determining the role GenAl will play in supporting existing technology-led initiatives. Plan for the infrastructure it will require to scale GenAl across multiple business use cases and multiple business units." 

3. Collaborate with legal, compliance and risk

Gartner underlines how vital it is to "collaborate with legal, compliance, risk, and other executives to review your organization’s risk management framework and make updates by accommodating new challenges posed by generative AI, such as bias and data hallucinations. Anticipate regulations to evolve rapidly and differently by region (see 3 Scenarios to Plan for the Impact of GenAI Regulation on Banking)."

4. Safe experimentation and usage of GenAl capabilities

We believe that Gartner suggests to "establish a cross-functional governance board to craft a governance policy for safe experimentation and usage of GenAI capabilities by identifying use cases for experimentation and ensuring proper control and oversight through human verification, clear decision rights and disclosure obligations, including source citations."

Why prioritize GenAI – Gartner sheds light on the benefits

"Per the 2024 Gartner CIO and Technology Survey, 42% of banking CIOs have deployed, or are planning to deploy, generative AI (GenAI) in the next 12 months". Gartner highlights the benefits of such technology in internal applications "such as code generation, fraud prevention, contact center assistants and personalized products and marketing content generation." 

However, Gartner emphasizes that "the risks that banking CIOs are most concerned about include the misuse of AI for fraud, model hallucinations, data privacy risks and output biases."

Therefore, "There are numerous experiments underway where banking leaders are testing GenAI capabilities to improve internal efficiency and better manage risk, namely through fraud prevention, code generation and contact center assistants"