Gen AI Risks Are Necessary to Reap Its Benefits, Study Finds

With more banks adopting or planning to adopt Gen AI, risk is expected to rise, yet 60% of banking CEOs believe accepting significant risk is necessary to harness automation advantages and stay competitive, according to IBM.

The 2025 Global Outlook for Banking and Financial Markets found that banks need to leverage Gen AI to deliver tailored investment strategies, as 27% of retail banking customers would trust a bank for investment decisions if they had access to personalized conversations with financial advisors.

An additional 24% of customers are more likely to choose a bank that provides personalized advice within financial planning and risk simulations.

The report also revealed that banks are also using the technology to decode customer behavior as Gen AI can enhance their analytics for content creation.

In 2024, 78% of banks expected to use Gen AI to conduct data analysis and capture insights from digital channels, up from 36% the previous year. In addition, 86% reported they plan to use Gen AI to analyze customer insights by the end of 2025.

Therefore, banks must embrace risk to deliver tailored investment strategies and decode customer behavior. However, achieving enterprise-wide scalability of AI innovation requires a shift in risk management culture—one where every banker becomes an AI risk manager, according to IBM.

The growing adoption of Gen AI by banks aligns with customers becoming increasingly comfortable with technology in banking services.

This shift is reflected in the fact that over 16% of customers worldwide are open to a fully digital, branchless banking experience as their primary relationship.

Meanwhile, 46% of global consumers prefer using mobile wallets for dining out payments. However, US consumers lag behind, with 72% opting for physical bank cards over other common payment methods.