NTT DATA Reveals Global GenAI Trends in Banking Productivity vs. Cost-Cutting
NTT DATA, a leading global provider of digital business and IT services, has released a comprehensive global research report shedding light on the integration and impact of generative AI (GenAI) within the banking sector. Titled “Intelligent Banking in the Age of AI,” the study reveals a growing adoption of GenAI across financial institutions worldwide but also highlights a notable divide in how banks perceive its benefits and strategic implications.
Despite the increasing embrace of GenAI, the report finds that banks and financial institutions remain split regarding its practical applications and outcomes. Only half of banks (50%) view GenAI as a tool for boosting productivity and efficiency, while a nearly equal proportion (49%) see it as a means of reducing operational IT costs. This dichotomy underscores both the potential and challenges associated with GenAI adoption in banking.
GenAI: The Next Disruptive Force in Banking
Generative AI is proving to be one of the most disruptive innovations in banking history. Unlike previous technological advancements, which primarily improved isolated aspects of banking operations, GenAI has the capacity to embed intelligence at every layer of the banking ecosystem—from backend core banking systems to customer-facing applications.
The research highlights a sharp increase in adoption rates, with 58% of banks fully embracing GenAI’s transformative capabilities in 2024—up from 45% in 2023. This rapid growth signals an industry-wide shift toward AI-driven innovation, making it clear that GenAI is no longer a question of “if” but “when” banks will fully implement it.
“Generative AI represents a pivotal moment for the banking industry,” said Robb Rasmussen, Head of Global Marketing & Communications at NTT DATA. “While its potential benefits are enormous, the implementation challenges are equally complex. Given the substantial investment banks are making in GenAI, achieving a strong return on investment (ROI) is paramount. Financial institutions must develop a structured approach, combining clear strategic goals, tailored implementation methods, and robust governance frameworks.”
Financial Constraints and the Pressure to Deliver ROI
As banks invest heavily in GenAI, the pressure to demonstrate tangible ROI is mounting. However, financial institutions differ in their strategic priorities and the expected outcomes of their GenAI initiatives.
The report indicates that while GenAI is widely seen as a solution to long-standing productivity challenges, only 50% of banking executives believe it will significantly enhance operational efficiency. Similarly, while reducing IT costs is a major consideration, only 49% of financial institutions view GenAI as a means to cut IT spending effectively.
The financial pressure is particularly evident in regional disparities:
- In the U.S., nearly 59% of banks prioritize reducing IT budgets, and 47% aim to cut operational costs.
- European banks, however, place a higher emphasis on productivity (46%), while only 43% prioritize IT budget reductions and 36% focus on lowering operational costs.
- APAC banks exhibit the highest enthusiasm for GenAI’s productivity benefits, with 58% seeing it as a key driver of efficiency.
- Latin American banks (LATAM) show a balanced focus, with 48% seeking a competitive advantage through GenAI.
- Japanese banks demonstrate a more cautious approach, with only 35% prioritizing productivity enhancements.
Key Performance Indicators (KPIs) for Measuring GenAI Success
The report outlines critical KPIs that financial institutions are using—or planning to use—to evaluate the success of their GenAI implementations. These include:
Different Regions, Different Approaches to GenAI Implementation
As GenAI continues to shape the banking industry, the strategies employed to harness its benefits vary significantly across regions and institutions. The research identifies three primary approaches that banks are adopting:
- Human-AI Collaboration (51%) – Over half of banks are integrating GenAI into their existing workflows, ensuring that human expertise complements AI-powered efficiencies.
- Hybrid AI and Legacy Systems (47%) – Nearly half of financial institutions are leveraging GenAI alongside their existing infrastructure, rather than opting for full automation.
- Full Automation (28%) – A growing number of banks aim to eliminate manual processes entirely, relying on GenAI for end-to-end automation.
Regional attitudes toward full automation also diverge:
- 25% of UK banks and 24% of European banks favor complete automation.
- 32% of North and South American banks are inclined toward full automation.
- 35% of Japanese banks express the highest enthusiasm for entirely AI-driven operations.
Balancing Innovation with Financial Prudence
According to Robb Rasmussen, banks must balance technological innovation with fiscal responsibility to ensure long-term success. However, many financial institutions still lack maturity in their GenAI strategies and may struggle to determine the best starting point.
Partnering with systems integrators is a recommended strategy, as it enables banks to:
- Access the latest AI-driven insights and best practices.
- Ensure compliance with evolving regulatory requirements.
- Maintain robust data protection and cybersecurity measures.
“By working with specialized AI providers and systems integrators, banks can maximize the potential of GenAI while mitigating risks,” Rasmussen emphasized. “This approach will not only help banks achieve the desired ROI but also ensure they uphold strict security and regulatory standards in the process.”
Final Thoughts: The Future of Banking with GenAI
As generative AI continues to gain traction in the banking sector, financial institutions must navigate a complex landscape of challenges and opportunities. The findings from NTT DATA’s report suggest that while GenAI presents unprecedented advantages in terms of efficiency, cost reduction, and innovation, its success hinges on a well-defined strategy, strong governance, and region-specific adaptation.
With more than half of global banks already embracing GenAI, the coming years will likely see even deeper integration of AI technologies into financial services. However, for banks to truly capitalize on this revolution, they must ensure that their investments in GenAI align with both their financial goals and long-term digital transformation strategies. The ability to strike the right balance between automation, human oversight, and financial prudence will ultimately determine which institutions emerge as leaders in the AI-powered future of banking.
