Only one in four banks use AI effectively

New Delhi

A recent report by Boston Consulting Group (BCG) says just one out of four banks globally is using artificial intelligence (AI) to gain a real competitive edge. Despite the rapid rise of AI, many banks are slow to adopt it in a meaningful way.

The report, titled The AI Reckoning in Banking, reveals that most banks are still only testing AI in limited areas. They lack a clear plan, proper investment, or goals for scaling up. This is causing a growing divide between banks using AI well and those falling behind.

New AI tools, like generative AI, are changing the rules. They are making banking more digital and transparent. Customers can now easily switch banks, pushing down profit margins. Banks also face pressure as AI cuts into their traditional services like lending, risk checks, and fee-based income.

BCG says outdated systems, poor data setups, and weak management tools make it hard for banks to use AI fully. Two-thirds of banks also struggle to hire skilled AI workers. Many leaders don’t fully understand AI, and regulatory issues slow down progress.

The report warns that banks must focus AI spending on the right areas. Aligning technology with people and strong processes is key to staying ahead in the race.