The company Cofinpro supports Germany’s leading banks and asset management companies in management, specialist and technology consulting. Customers include large commercial, state and development banks as well as the cooperative financial group. Therefore, analyses by Cofinpro are always very insightful for me and my work.

Artificial intelligence has already arrived in banks. New technologies have usually only been gradually adopted in banks in the past – not so with artificial intelligence (AI). The speed at which this technology is being adopted by financial service providers is unique. Testing, experimenting, and implementing are taking place in all institutions. Given the efficiency and innovation potential, no one wants to miss out.

The time for first steps and test balloons is over, and in 2024, the focus will be on performance and benefits. From answering customer inquiries to summarizing content and analyzing complex business processes, AI is used extensively. Banks are finally becoming technology companies as well, according to a conclusion by Cofinpro. Banking experts believe that AI will gradually take on more and more tasks, often without the customer noticing. The following five trends are crucial for banks in 2024:

1. Banks are pioneers in AI

Artificial intelligence is gradually taking on more and more tasks. Three significant advantages speak for this: firstly, increasing advisory competence in direct customer conversations. Secondly, a noticeable relief for bank employees and thus the possibility to focus on complex issues more individually. And thirdly, comprehensive efficiency gains in time-consuming processes through automation. By the end of 2024, all leading institutions in Germany will answer general inquiries at least partially with the help of AI.

2. AI is much more than ChatGPT

ChatGPT has opened many doors and changed the perception of LLMs (Large Language Models). But LLMs are not suitable for all use cases. For example, predictive analytics or machine learning applications have been in use in investment banking or credit departments for some time. What’s new now is that there is a significant increase in investment and willingness to use AI technologies. While they were previously used very focused, the rollout and use are now broad, often driven strategically by top management.

3. AI enables new and optimized services

With AI support, banks will be able to design their service offerings more precisely and tailor them to the needs of individual customers down to the smallest detail. Such individualization was previously only possible in the premium segment due to the high effort. And: many activities that were previously manually performed will be transferred to IT systems in the future. Even the processing of unstructured data such as phone calls or handwritten notes will be read, sorted, and evaluated by AI in seconds.

4. Along with technological development, the tasks of the workforce are also changing

Simple and monotonous tasks in banks are increasingly being taken over by AI. This creates space for employees to focus on complex, non-automatable tasks or direct advisory conversations with customers. The work is changing, but it also requires more flexibility and willingness to learn. As banks already require solid computer skills (e.g., for the Office package) today, the ability to handle AI technologies confidently will also be expected in the future.

5. Without effective data architectures, AI cannot reach its full potential

AI can only deliver first-class results if the data basis is of high quality. Instead of a central data warehouse, modern data architectures will prevail: individual data spaces subject to a common set of rules. The silos must be connected and interoperably linked. This way, the subject matter expertise remains in one area, but cooperation between individual departments is guaranteed.

Cofinpro conclusion: ChatGPT was a door opener and helps AI applications break through. They can fulfill many promises of digitization. But even the best AI cannot work wonders without a suitable data basis. Therefore, banks should pay more attention to the quality and availability of their data pool and work on their change management competence.

Bank advisors will still exist in the future, but with a different range of tasks than today and embedded in a highly specialized field. In the future, the most competent employees will be those who can adapt best to new situations and master the choreography between cutting-edge technologies, the bank’s goals, and customer needs.

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