Home » Banking sector leads in AI investment: Spends over $20 billion in 2023, highest among all sectors

Banking sector leads in AI investment: Spends over $20 billion in 2023, highest among all sectors

by Simon Jones Tech Reporter
20th Mar 24 4:24 pm

According to data from Stocklytics.com, worldwide spending on AI-centric systems reached an estimated $154 billion, with the banking sector leading the pack with investments totaling $20.6 billion.

Moreover, the retail industry’s AI spending amounted to $19.7 billion. Professional services followed the retail sector, with $16.02 billion allocated for AI.

According to Edith Reads, a Financial expert at Stocklytics, investing in AI presents banks with a significant opportunity to strengthen their competitive edge and stand out in the market.

Reads said, “Several banks are Integrating AI technologies to improve efficiency across their operations and impact areas such as credit evaluation. These advancements can potentially benefit banks strategically in terms of business growth, financial performance, and risk management in the long run.”

JPMorgan Chase leads AI banking

Given banks’ substantial investment capacity, extensive proprietary data management, and adaptable business models, it is no surprise that they have emerged as eager pioneers of artificial intelligence.

JPMorgan Chase stands out as a leader in leveraging AI within the banking sector. The bank is notably leading the way in AI research, showcasing its role in driving AI innovation within the financial industry. Additionally, the bank is committed to transparency and emphasizes practices in its AI initiatives.

Capital One and the Royal Bank of Canada (RBC) closely follow JPMorgan Chase, securing the 2nd and 3rd positions regarding AI maturity. These institutions consistently excel in AI patents, research activities, and partnerships.

Other high-performing banks include Wells Fargo, UBS, and CommBank. Furthermore, most banks are based in North America, indicating the presence of AI innovation in the banking industry on this continent.

Concerns of AI in banking

Some challenges related to AI adoption in banking include concerns about explaining generated content and addressing biases inherent in data. In particular, selection bias could worsen profiling issues based on gender, race, or ethnicity within banking processes such as credit scoring and customer discrimination. Moreover, environmental concerns arise from the energy consumption in training AI models, prompting discussions on sustainability practices.

In light of the changing regulations, it is crucial to tackle these issues to promote equitable use of AI in the banking industry.

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