Generative AI (genAI) is set to transform financial services across banking, insurance, and wealth management. This technology is advancing through distinct phases, offering transformative capabilities such as enhanced decision-making, personalized services, and innovative product development. With significant funding growth and increasing adoption, genAI is set to drive unprecedented innovation and operational efficiency in the industry, says GlobalData, a leading data, and analytics company.
Manish Dixit, Practice Head of Disruptive Tech at GlobalData, comments: “Despite a downturn in the overall funding for financial services startups, the resilience of genAI startups in financial services has been remarkable. Funding in this sector surged over 30% from 2023 to 2024 YTD, indicating robust investor interest. This influx of capital presents significant opportunities for finance businesses to leverage genAI, driving transformative capabilities and opening new avenues for growth and innovation. As businesses increasingly adopt this technology in 2024, genAI in financial services could enhance decision-making, personalized services, and groundbreaking product development, heralding a transformative era in the industry.”
Mukesh Singh, Senior Disruptive Tech Analyst at GlobalData, adds: “GenAI is vital in driving innovation in financial services, as the sector leads the way in exploring its potential, with use cases evolving from trials to widespread industry adoption. In the development of genAI within financial services, the technology initially focuses on tasks such as generating financial reports, analyzing customer sentiments, and deploying chatbots. It can then advance to addressing complaints, improving customer experiences, and automating compliance through a combination of human and technological collaboration. Eventually, genAI is expected to independently offer customer support, integrated services, real-time financial insights, and additional services.”
According to GlobalData’s Disruptor Intelligence Center, genAI is driving advancements in operational efficiency, customer service, and risk management across financial services.
Banking and payments
Banks are collaborating with tech vendors to test genAI. Use cases include AI-driven chatbots and synthetic data to enhance fraud detection and cyber resilience. From 2025 to 2030, genAI is anticipated to provide predictive financial insights, support middle-office processes like risk assessment, and enhance operational efficiency and security. By 2031 and beyond, genAI-driven advisors are expected to handle routine interactions, reserving human assistance for high-value transactions, and thereby enhancing customer satisfaction and operational efficiency.
Insurance
Insurers are trialing genAI to improve customer interactions and chatbot capabilities, gradually enhancing service delivery. Between 2025 and 2030, advanced AI models are expected to analyze claims data for better fraud detection and operational performance. By 2031, genAI could offer real-time, human-like responses to customers, further streamlining customer service and workflows.
Wealth management
The wealth management sector is leveraging genAI for personalized, human-like interactions, with early prototypes assisting advisors in compliance and advisory services. From 2025 to 2030, genAI is likely to create personalized financial plans, dynamically adjust asset allocations, and automate compliance and onboarding processes, improving efficiency and client service. By 2031 and beyond, genAI is anticipated to enable full-service robo-advisors to autonomously manage portfolios based on client-defined risk tolerances, offering personalized and efficient wealth management services.
Singh concludes: “GenAI is expected to improve the financial services sector capabilities by driving innovation and providing valuable solutions to customers. As technology develops, managing data privacy, ethical issues, and legal requirements could be essential for a successful rollout.”
