How the world's top banks and insurers are adopting GenAI tools

In recent years, the integration of generative artificial intelligence (GenAI) tools within the financial sector has seen remarkable growth. A study conducted by ORX, a leading operational risk association, reveals that 75% of the world’s major banks and insurers are now utilizing external GenAI applications in their operations.

The most widely adopted tool is Microsoft Copilot, used by over 61% of those surveyed. It’s followed by ChatGPT, engaging 52%, and Google’s Bard/Gemini at 9%.

Despite the widespread adoption, nearly 17% of these firms are still in the process of establishing clear oversight responsibilities. This uncertainty highlights the absence of a uniform best practice model, raising questions about which functions and teams should steer the GenAI implementation.

The “Risk Management Considerations for Generative AI Report” by ORX points to a significant shift in focus. Previously, the conversation was centered on whether these tools should be permitted for use. Currently, the emphasis is on maximizing their potential benefits. According to the report, 75% of the surveyed entities either have an AI use policy in place or plan to implement one within the next 18 months. However, the challenge remains for some institutions to effectively disseminate these policies across their operations.

ORX Research and Information Director Steve Bishop noted significant changes since last October: “Only last October (2023), the picture regarding the use of GenAI in daily operations was very different, with many banks and insurers taking a cautious approach or even blocking access, mainly to ChatGPT. Since then, we’ve seen a slight shift and some firms have been using pilot exercises to explore the value of these tools and understanding use cases.

“Microsoft Copilot features highly, with some firms deploying it across the whole organisation. This is perhaps due in part to the fact that Copilot is integrated with the Microsoft ecosystem that many firms use.”

Privacy concerns top the list of GenAI-related risks, specifically the unauthorised use or disclosure of personal or sensitive information. Other significant concerns include impaired fairness and security threats. Although the environmental, social, and governance (ESG) impacts of GenAI have not yet become a primary concern, it is anticipated that attention to these issues will grow as the adoption and integration of these technologies advance.

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