IBM unveiled its 2025 Outlook for Banking and Financial Markets, providing critical insights into the future of the banking industry.
This annual forecast by the IBM Institute for Business Value outlines significant transformations due to the adoption of generative AI and other technological advancements.
The study indicates that generative AI is poised for a dramatic uptake within the banking sector. While only 8% of banks had developed generative AI systematically last year, 78% of banks are now applying it in a more tactical manner. The shift from pilot programs to full-scale execution reflects a broader strategic realignment towards agentic AI, which is set to redefine service offerings across the sector.
A notable divergence in financial performance is emerging as banks reassess and remodel their business processes. The report underscores that successful execution of these new business models is crucial and will determine the industry’s frontrunners from the rest.
Moreover, 60% of surveyed banking CEOs acknowledged the necessity of embracing certain risks associated with automation to gain competitive advantages. The adoption of automation and AI technologies is seen as vital for enhancing operational efficiencies, customer service, and risk management.
The survey also highlights a consumer shift towards digital banking solutions. Over 16% of global clients now prefer a branchless, digital-first banking approach. This trend indicates a move from traditional mass-market digital offerings to more sophisticated services, such as embedded finance and specialized advisory for affluent clients and SMEs.
Shanker Ramamurthy, IBM Consulting’s Global Managing Director for Banking & Financial Markets, commented on the findings: “We are seeing a significant shift in how generative AI is being deployed across the banking industry as institutions shift from broad experimentation to a strategic enterprise approach that prioritizes targeted applications of this powerful technology. As banks and other financial institutions around the world gear up for a pivotal year of investing in transformation, technology, and talent, we anticipate their efforts coalescing around initiatives using generative AI to level up customer experience, boost operational efficiency, reduce risks and modernize IT infrastructure.”
This extensive report also draws from C-suite leader sentiment, bank customer behaviour, and economic data from key global markets including the United States, Canada, the European Union, the United Kingdom, Japan, China, and India. It offers valuable perspectives for financial institutions and their partners to navigate the upcoming shifts in the global financial landscape.
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