Banks are maturing in their AI journey, but is ROI still a distant goal?

Who will win the AI showdown in banking?

What started as a growing trend last year has now become a full-blown competition, as banks — from the biggest players to smaller institutions — dive headfirst into AI investments.

However, the stakes are high. As the industry pushes for clearer standards on AI risks and controls, it concurrently faces a new challenge: turning theoretical plans and investments into measurable successes. Investors are increasingly expecting banks to translate their AI-driven strategies into real-world results and tangible returns, whether through cost savings, risk mitigation, or new revenue streams.

AI is still in its nascent phase, especially within the banking sector, and whether it’s too soon to seek returns on these foundational investments is a different conversation altogether.

Today, we delve into:

• The progress banks have made on their journey toward AI maturity
• Are we jumping the gun by seeking ROI from banks’ foundational AI investments at this point?
• The frontrunner and the runner-up in the AI race and the factors propelling their advancements

Brief rundown

J.P. Morgan Chase (JPMC) has secured the top position in this year’s AI Index, marking its third consecutive appearance in the top 10 across all AI advancement metrics detailed in a new Evident Banking AI Index. The report focuses on four essential AI evaluation metrics: Innovation, Leadership, Transparency, and Talent.

Given Jamie Dimon’s consistent advocacy for AI and JPMC’s recent strong advancements in the space, it’s not surprising to see the firm leading the charge in the AI race. However, what stands out is that it is closely followed by Capital One, the Royal Bank of Canada, and Wells Fargo, indicating that North American banks are leading the way for the most part in exploring AI’s potential.

One of the strongest pillars contributing to North American banks’ progress is talent acquisition, particularly in AI Development and Data Engineering. US banks are increasingly solidifying their positions in this area. The three US incumbent banks — Wells Fargo, JPMC, and Capital One — account for 17.5% of the current AI talent pool, reflecting a significant 19.4% increase from last year, according to the report.

The frontrunner

I’ve been closely following JPMC’s work in AI and its initiatives from Q4 2022 onward. Building on that research, the factors that likely contributed to the bank achieving a leading position in AI advancement across multiple pillars include:

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