Big banks are increasingly investing in generative artificial intelligence (AI) efforts with the goal of boosting profits. Companies such as Goldman Sachs, Bank of America, Morgan Stanley, Wells Fargo, and JPMorgan Chase are ramping up their AI initiatives by striking deals, partnerships, and hiring specialized talent to transform their businesses. JPMorgan CEO Jamie Dimon likened AI to transformative inventions like the printing press and the internet. The adoption of AI in banking could potentially increase profits by $170 billion, reaching over $1.8 trillion by 2028.
Early-stage AI use cases in banking focus on augmenting staff productivity and efficiency. Over the next few years, AI is expected to transition from internal use to more external-facing applications. The launch of OpenAI’s ChatGPT in 2022 sparked widespread interest in generative AI, prompting an influx of investments and partnerships in the AI space. Corporate boardrooms are now focused on finding use cases for AI, forming partnerships, and hiring AI talent to support its implementation.
Wall Street bank Morgan Stanley was among the first to embrace AI, introducing AI assistants for financial advisors powered by OpenAI. The AI @ Morgan Stanley Assistant and Debrief aim to streamline administrative tasks, freeing up time for advisors to focus on building client relationships. Similarly, Wells Fargo launched its virtual AI assistant, Fargo, to assist retail customers with banking inquiries and transactions. Partnerships with tech giants like Google and Nvidia have enabled banks to develop AI products for fraud protection and customer service.
Partnerships with tech companies have played a crucial role in enabling big banks to leverage large language models (LLMs) for AI applications. Morgan Stanley collaborates with OpenAI, while Wells Fargo’s AI assistant is powered by Google Cloud AI. Deutsche Bank partnered with Nvidia for fraud protection, and BNP Paribas and TD Bank Group signed agreements with Mistral AI and Cohere, respectively, to embed LLMs in customer services and IT operations. These partnerships allow banks to access advanced AI capabilities to enhance their services.
In addition to striking partnerships, big banks have been actively hiring AI talent to support their AI initiatives. Despite industry-wide layoffs, AI talent at banks has grown by 9% in the last six months, outpacing the overall industry headcount growth. Banks are hiring data scientists, machine learning engineers, software developers, and AI specialists to drive their AI strategies. The commitment to AI innovation is evident in the appointments of key AI executives at firms like Wells Fargo, Morgan Stanley, and JPMorgan.
While the full impact of AI investments may not be immediate, banks are making significant strides in integrating AI into their operations. The focus on ROI and long-term benefits of AI adoption is driving these firms to invest in AI talent, partnerships, and new use cases. Experts predict that 2026 could be a tipping point for AI adoption in banking, with a potential for substantial ROI generated from AI use cases. As big banks continue to invest in AI technology and talent, they are positioning themselves for future growth and competitiveness in the evolving financial landscape.
