COMMENTARY: Banks will soon face the dark side of AI

AI could deliver sizable savings for banks, but it may also intensify competition by making it easier for customers to shop for deposits and loans, tightening lenders’ margins. The analysis points to lenders already using large language models to cut call-center workloads, reduce IT helpdesk demand and lower software-development costs, with potential spillover into areas like anti-money laundering, fraud checks and credit analysis. Bank of America’s reported $800 million in annual cost and revenue gains from generative AI follows a $400 million upfront investment. Europe is seeing similar targets, with SocGen citing up to €600 million and Commerzbank €500 million by 2030. Key uncertainty is whether savings flow to shareholders as customers gain negotiating power.