Banks are adding AI to a model that AI makes obsolete (www.techradar.com)

Banks are now integrating AI that potentially changes how they operate from traditional models, where human decisions lead the process, to AI-driven systems that autonomously analyze customer goals and manage finances. A McKinsey report suggests that generative AI could add significant value, between $200 billion and $340 billion annually, but many banks are merely layering AI over outdated processes instead of rethinking their architecture. There is a pressing need for banks to create integrated systems that allow AI to function across diverse financial operations, moving beyond mere process improvements to a model centered around continuous decision-making that prioritizes customer objectives. The implications of this shift are profound. It suggests a future where banks act as intelligent systems, proactively managing customer finances by anticipating needs and making informed decisions without waiting for user instruction. Initiatives, such as Deutsche Bank's development of AI agents for risk management and efforts from Visa and Mastercard to enable AI-driven payments, signal a move towards this model. To fully harness AI's potential, banks must rethink their structures and promote a seamless orchestration of data across various applications, which could pave the way for entirely new financial institutions built around AI capabilities within the next five years.