December 5, 2023 | McKinsey & Co.
- Setting up genAI pilots is easy; scaling them to capture material value is hard. In this article, a recipe for success is emerging.
Summary
Gen AI in banking: The article discusses the potential value and challenges of scaling generative AI (genAI) in the banking industry and provides seven dimensions of capabilities that banks need to succeed.
Value potential: It cites a McKinsey Global Institute estimate that genAI could add $200 billion to $340 billion annually in value for the banking sector, mainly from increased productivity across various segments and functions.
Scaling challenges: It identifies several factors that make scaling genAI different from other technologies, such as the scope, pace, talent, and risk implications of the new capability.
Seven dimensions: It outlines seven dimensions of capabilities that banks need to build or enhance to scale genAI effectively: strategic road map, talent, operating model, technology, data, risk and controls, and adoption and change management.
GenAI certainly has the potential to create significant value for banks and other financial institutions by improving their productivity. Indeed, new examples emerge weekly. But scaling up is always hard, and it’s still unclear how effectively banks will bring genAI solutions to market and persuade employees and customers to fully embrace them. Only by following a plan that engages all of the relevant hurdles, complications, and opportunities will banks tap the enormous promise of genAI long into the future.
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