Intelligent banking

AI has the potential to revolutionize banks

To understand how AI will usher in a new era of smart banking and create an intelligent bank, KPMG conducted an extensive research program, interviewing executive leaders across eight key global markets. This research outlines a comprehensive blueprint for AI in banking, helping banks chart a path toward unlocking AI’s immense value.

At-a-glance insights:

Chart on expectations and pressures of AI investment in banking. 80% believe that banks adopting AI gain a competitive advantage. 62% expect a moderate to very high return on investment. There is pressure to show results, with 70% feeling pressure from shareholders to show an immediate return. Investment will increase: 70% plan to increase their AI budget, with 62% of those anticipating an increase of up to 20% and 38% anticipating an increase of more than 20%.

The Banking sector is widely investing in AI, although the majority are only investing moderately.

82% report a moderate-high allocation of their global technology budget to AI initiatives

Two charts on the allocation of the overall technology budget to AI initiatives. The first bar chart shows the percentage of companies at each investment level: Low (0%–2%), Moderate (3%–10%), High (more than 10%) and Don't know. The second chart, focused on companies that will increase investment, details the size of the increase: Small (0%-5%), Moderate (6%-20%) and Large (over 20%).

Leadership goals for AI adoption focus heavily on operational gains rather than strategic value

Horizontal bar chart listing the main expected benefits of investing in AI, in order of percentage. The most frequently cited benefits are: Increasing operational efficiency (45%), Improving customer experience (42%), Increasing revenue (41%), Mitigating business risks (40%) and Reducing costs (37%). The list continues with other benefits such as competitive advantage, improved decision-making and data management, among others.

Our study reveals that, although some banks are quite advanced in their use of AI, globally, 71% of banks believe it is prudent to wait for greater clarity on the context of AI before making significant investments. However, even while adopting a cautious approach, Portuguese banks should accelerate their initiatives and build solid foundations today for the large-scale adoption of AI in areas such as strategy, governance, data, infrastructure and skills. Otherwise, they risk falling behind when the market finally gains greater clarity on AI applications, technology and regulation.

Rodrigo Lourenço

Partner de Advisory

KPMG Portugal

How to realize value from your AI transformation journey

To address these challenges, KPMG introduces the three phases of AI value — a framework designed to guide banks through the AI adoption journey. This phased approach provides a structured roadmap, helping banks prioritize investments, align initiatives with business goals, and position themselves effectively in the age of AI in banking.

Enable

The Enable phase focuses on enabling people and building AI foundations. Organizations appoint a responsible executive, create an AI strategy, identify high-value use cases, boost AI literacy, align with regulations and establish ethical guardrails. AI pilots are launched across functions, while cloud platforms and pre-trained models are leveraged with minimal customization.

Embed

The Embed phase integrates AI into workflows, products, services, value streams, robotics, and wearables, delivering greater value. A senior leader drives enterprise-wide workforce redesign, re-skilling and change, embedding AI into operating models with a focus on ethics, trust and security. AI agents and diverse models are deployed, supported by cloud and legacy tech modernization, while enterprise-wide data enhances operations.

Evolve

The Evolve phase evolves business models and ecosystems, using AI and frontier technologies like quantum computing and blockchain to solve large sector-wide challenges. AI orchestrates seamless value across enterprises and partners. Emphasizing ethics and trust with real-time security, this phase uplifts human potential with broad and deep workforce training, fostering a creative, innovative and value-driven future.

Intelligent banking

A blueprint for creating value through AI-driven transformation

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