Financial Services Will Embrace Generative AI Faster Than You Think

Historical financial data will be rich fodder for generative AI.

The ability to harness large language models (LLMs) to learn and process reams of unstructured data, along with enormous computing power, has given a major boost to financial services providers. While most financial firms are already using existing data to predict outcomes and classify risk, generative AI has the potential to create fresh content for clients and providers.

When it comes to generative AI, both legacy institutions and fintech newcomers have competitive advantages and disadvantages. The former can rely on a massive amount of existing financial data, but they will face issues in regard to accuracy and privacy concerns. The latter may need to resort to publicly available data to teach their LLMs, but they should be able to generate proprietary data rapidly.

Generative AI offers financial institutions opportunities in five major areas: clients, operations, compliance, risk and forecasting.

Firms will...