LONDON, May 28, 2024 - The proliferation of artificial intelligence (AI) has afforded banks a multitude of benefits through its automation capabilities, such as efficiency gains, cost savings, and a boost for product innovation and development. According to new research from Omdia, the foremost AI use case in terms of software revenue is virtual assistants, which are projected to generate more than $2.7bn for IT vendors by 2028.
 
The new research from Omdia’s AI in Financial Services (FS) report finds that virtual assistants are the most prevalent use case, primarily utilized for internal purposes. However, this trend is expected to shift as nearly half of retail banks state that their top front-office priority is providing a more consistent and sophisticated interaction with their contact centers. “Although many banks are striving to be pioneers in launching generative AI (GenAI)-based virtual assistants as a tool for attracting new customers, there is a danger that it could alienate existing customers if not executed effectively,” said Philip Benton, Omdia’s Principal Analyst for Financial Services.

Fraud detection and mitigation stand out as another top use case for AI in FS, especially as fraudsters increasingly leverage AI to exploit weaknesses within internal banking fraud controls. However, banks are also adopting AI to combat fraud. Omdia expects that fraud management will remain a central use case for predictive AI, rather than GenAI. Omdia forecasts that AI software revenue for fraud detection and mitigation will reach $1.1bn by 2028, with a CAGR of 16% from 2023 to 2028.
   
Wealth management firms are also implementing generative AI to enhance client service and efficiency. This technology will assist wealth managers in streamlining internal searches and developing relevant research for specific client requirements. Andrew Brosnan, Omdia’s Principal Analyst for AI in Healthcare and Financial Services noted, “Financial institutions are now deploying AI internally to aid investment research, market analysis, and portfolio construction and rebalancing.”

The report is available now in Omdia’s Financial Services Spotlight Service and Artificial Intelligence Viewpoint Service and, as well as the applications in financial services, covers the ecosystem, regulatory developments and market outlook for predictive and generative AI.