Artificial intelligence (AI) is critical to a bank’s digital transformation, while integrating legacy technologies and security issues remain key challenges for the UK banking sector.

This is according to a survey from financial services IT consultancy GFT, which found that 86 per cent of UK respondents acknowledged the importance of AI, while a quarter said that it has strategic importance within their organisation.

Virtual customer assistants such as chatbots top the AI wish list for retail banks in the UK (65 per cent), followed by next best action and personalised customer interfaces (46 per cent) and robot process automation (35 per cent). Lower operational costs (77 per cent), greater customer engagement (73 per cent) and risk reduction are the most frequently cited benefits for these solutions.

With AI forming an important part of digital transformation projects, meeting customer expectations (43 per cent), reducing operational costs (23 per cent) and increasing revenues (20 per cent) are the top drivers for digital transformation. The results show that the primary approach for digital transformation projects is Banking as a Platform (BaaP).

Christian Ball, head of retail banking at GFT said: “Banks know that they are sitting on a wealth of information, especially unstructured customer data, which is not currently being used to its full capacity. AI solutions such as chatbots, process automation and personalised interfaces, powered by open APIs, are critical to the success of digital transformation projects.

“Challenges such as legacy systems, migration to the cloud and security and privacy concerns remain top concerns. It’s encouraging to see so many UK banks embracing new ways of working and recognising the increasing importance of these new technologies but there is still much work to be done.”

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