Transformative technologies like generative AI (gen AI) have emerged as a priority for banks since their launch in 2022, yet progress is varied. A McKinsey and IACPM study surveyed 44 global financial institutions, revealing that about 52% see gen AI as a key focus. Applications in credit decisioning, early-warning systems, and customer engagement are gaining traction, yet skepticism remains about financial benefits and scaling. While regional banks are taking the lead in deploying use cases, many banks face challenges such as lack of skills, structured frameworks, and cautious attitudes toward implementation. Despite these hurdles, institutions are hiring talent, building secure environments, and establishing centers of excellence. Leading banks are advised to align with stakeholders, standardize data, adopt modular architectures, focus on low-risk applications, and implement agentic AI for maximum efficiency. As they navigate these challenges, a strategic approach is essential to harness the transformative potential of gen AI, ensuring long-term success in the financial sector.
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