IBM has released its annual outlook for the global financial services industry, predicting significant advancements in technology and transformation for 2025. The report from the IBM Institute for Business Value highlights key trends, including the growing adoption of generative AI (Gen AI) among banks.
According to the study, only 8% of banks were systematically developing Gen AI in 2024, while 78% approached it tactically. As banks transition from pilot projects to full execution, many are redefining their strategic approach to service expansion with agentic AI. This shift is expected to impact financial performance significantly.
The report notes that "steady banking convergence is giving way to contrasting financial performance," emphasizing that re-imagining business models and processes will differentiate successful institutions from others. Additionally, 60% of surveyed banking CEOs recognize the need to accept some risk to leverage automation benefits and enhance competitiveness.
The competition within the banking sector is evolving as over 16% of clients globally express comfort with a branchless, fully digital bank as their primary relationship. Banks are moving towards offering higher-value services such as embedded finance and advisory services targeted at affluent investors and small and medium-sized enterprises (SMEs).
Shanker Ramamurthy, IBM Consulting's Global Managing Director Banking & Financial Markets, stated: "We are seeing a significant shift in how generative AI is being deployed across the banking industry as institutions shift from broad experimentation to a strategic enterprise approach that prioritizes targeted applications of this powerful technology." He added that banks worldwide are preparing for a pivotal year by investing in transformation initiatives using Gen AI to improve customer experience, operational efficiency, risk management, and IT infrastructure modernization.
The report draws insights from analysis involving C-suite leader sentiment, bank customer behavior, and economic data across eight major markets: the United States, Canada, European Union, United Kingdom, Japan, China, India—and Japan again appears erroneously listed twice.
For further information or access to the complete report titled "IBM Institute for Business Value 2025 Outlook for Banking and Financial Markets," visit https://ibm.co/2025-banking-financial-markets-outlook.
IBM continues its role as a leading provider of enterprise AI solutions along with hybrid cloud architecture security measures tailored specifically towards supporting entities within various sectors like insurance capital markets payments providers among others through both consulting technological infrastructures offered under umbrella name 'IBM Technology'. More details can be found on their website www.ibm.com/industries/banking-financial-markets
Additionally mentioned was ‘The IBM Institute For Business Value’ known globally recognized think tank combining research data expertise academics delivering insightful content aimed at making smarter decisions possible amongst business leaders everywhere interested exploring thought leadership materials should check out www.ibm.com/ibv
