Banks Boost AI Adoption as Generative Tools Gain Traction

Banks have accelerated AI adoption, with the number of new use cases doubling in the first half of the year. Generative AI capabilities were used in over half of the 173 use cases deployed, while agentic AI tools are being tested by nine firms, with BNY, Capital One, and JPMorgan Chase disclosing details of their supporting architecture. Banks are focusing on optimizing generative AI deployments and assessing agentic AI experiments, with retail banking leading the shift towards outward-facing assistants.

Banks have significantly accelerated their adoption of artificial intelligence (AI) in the first half of 2025, according to a recent report by Evident Insights. The number of new AI use cases launched by 50 of the world’s largest financial firms doubled compared to the last half of 2024. Additionally, the number of technologists working on agentic AI grew more than tenfold [2].

Over half of the 173 use cases deployed by these banks leveraged generative AI capabilities. Nine of the 50 firms documented AI agents in the pilot or production phase, with BNY, Capital One, and JPMorgan Chase disclosing details of their supporting architecture for agentic workflows. This focus on optimizing generative AI deployments and assessing agentic AI experiments underscores banks' strategic efforts to harness the transformative potential of AI [2].

Retail banking has taken the lead in outward-facing assistants, using generative AI to upgrade legacy chatbots and power in-app avatars that personalize device-based customer interactions. Wells Fargo, for instance, beefed up its virtual banking assistant with Google’s Gemini 2.0 Flash and several other smaller internal models. Commerzbank leaned on Microsoft’s Azure AI toolkit to roll out AI avatar Ava in April. This shift towards customer-facing AI tools suggests a broader trend of banks aiming to enhance customer experiences and operational efficiencies [2].

The AI adoption trend is not limited to retail banking. Leading banks have placed AI tools in the hands of over 800,000 employees, representing two-thirds of their workforce. The majority of these tools are concentrated in front office applications, IT, and security functions, where AI has demonstrated significant wins. However, the report indicates that banks are looking to scale AI and bring more tools to customers in the second half of the year [2].

While AI adoption is surging, banks are also grappling with strategic contradictions around partnership models, cost optimization, and AI implementation, as seen in the earnings call of Better Home & Finance Holding Company. The company reported a 37% year-over-year revenue increase and a 25% growth in funded loans, driven by AI investments. Despite these gains, strategic contradictions around AI effectiveness and cost efficiency emerged during the earnings call [1].

In conclusion, the banking sector is undergoing a significant transformation driven by AI adoption. While the focus on generative AI and agentic AI is evident, banks are also navigating strategic contradictions and assessing the long-term impact of these technologies on their operations and customer interactions. As the sector continues to evolve, investors and financial professionals should closely monitor these developments for potential opportunities and risks.

References:
[1] https://www.ainvest.com/news/home-finance-contradictions-surface-partnership-strategies-cost-efficiency-ai-adoption-q2-2025-earnings-call-2508/
[2] https://www.ciodive.com/news/banks-accelerate-ai-adoption-agentic-automation-evident-insights/757463/