New Delhi [India], May 21 : Only one out of four banks worldwide is using artificial intelligence tools to gain a competitive advantage over peers, even as such emerging technologies are fundamentally transforming the banking sector, according to a report by consultancy firm Boston Consulting Group (BCG).
The banking industry is at a pivotal point in 2025. Artificial Intelligence (AI) is no longer an emerging trendit is a game-changer, unlocking new frontiers in efficiency, accessibility, and economic growth.
BCG's report, "The AI Reckoning in Banking," outlines how artificial intelligenceespecially generative and agentic AIis fundamentally transforming the banking industry.
The report also highlighted a widening gap between banks that are leading the AI shift and those falling dangerously behind.
According to the BCG report, the rest of the banks (3 out of 4) are experimenting on the marginsoften without strategic alignment, clear return on investment (ROI) metrics, or a path to scale.
BCG found that AI is dismantling traditional banking advantages.
Tools like GenAI and agentic AI are making it easier for customers to switch providers, reducing margins through pricing transparency, and shifting customer control to digital platforms.
Banks' profit models and core services are also under pressure, asserted the BCG report.
"AI-driven underwriting, real-time credit risk, and embedded finance ecosystems are eroding fee-based income and redefining the bank's role in the value chain," BCG noted.
BCG also found that most banks lack the infrastructure to scale AI.
"Legacy systems, fragmented data, and insufficient orchestration capabilities are blocking real-time, integrated AI applications. Fixing these gaps demands significant investment and executive-level commitment," BCG suggested.
The talent and governance gaps are also widening.
"Two-thirds of banks struggle to hire AI talent, and many still need to train leaders to interpret or challenge AI outputs. Meanwhile, regulatory uncertainty is slowing adoption, despite growing pressure to act proactively," BCG said.
In conclusion, it asserted that the message is clear: bankers who focus AI investments on high-impact areasand align tech with talent and processare pulling ahead fast.
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