How European Banks Can Fast-Track AI Adoption for Growth and Competitive Edge

How European Banks Can Accelerate AI Adoption

Bankers across Europe are shifting their focus. The latest Infosys Bank Tech Index reveals a move from merely cutting costs towards prioritising innovation and business growth. Artificial intelligence (AI) is becoming a key technology, with demand expected to intensify.

Strategic Priorities Are Changing

European banks now focus on scaling AI and cloud capabilities. Digital transformation is accelerating to improve both customer and employee experiences. These efforts aim to secure long-term competitiveness rather than just short-term savings.

AI: From Promise to Practical Use

AI is no longer just an emerging technology; it’s central to banking operations across Europe. The main uses include fraud detection and customer service, crucial due to strict regulations and the need to protect financial integrity. About 28% of banks report high value from AI in these areas.

AI-powered chatbots and virtual assistants improve customer interactions by offering personalised, real-time support while reducing operational costs. Still, nearly half of AI projects are in early stages due to data management and regulatory challenges. This calls for stronger data architectures and governance to fully benefit from AI.

The impact of AI spans productivity, quality, growth, and operational speed. Generative AI alone could contribute between $200 billion and $340 billion annually to the banking sector through improved efficiency. For example, ABN Amro uses generative AI to summarise customer calls and enhance contact centre efficiency. JP Morgan has cut payment validation errors by up to 20%, reducing fraud and operational costs.

At Infosys, AI-driven innovation has improved software development productivity by 7% to 15%, with nearly 18,000 developers generating almost 7 million lines of code assisted by AI. This approach optimises operations, enhances predictive capabilities, accelerates growth, and strengthens risk management, including compliance.

Data, Security, and Compliance Remain Challenges

Data privacy and security are major barriers to AI and cloud adoption. Banks face complex regulations and must protect sensitive customer data. Although over half of European banks say their data architecture is AI-ready, many struggle to implement AI effectively within these systems.

Security concerns also influence decisions on cloud migration. Strong governance, encryption, and compliance frameworks are essential for safely managing data.

Innovation Builds Customer Loyalty

Customer trust no longer depends mainly on a bank’s size or reputation. Convenience and relevant service offerings now drive loyalty. The demand for technology talent, especially in AI and cloud, is growing quickly.

Cybersecurity remains a priority, but hiring skilled professionals in AI is a significant challenge. Competition from global banks intensifies this issue. Many banks invest heavily in reskilling to fill the talent gap.

Government initiatives support this effort. The European Commission’s AI Continent Action Plan aims to position Europe as a leader in AI by expanding education and training. The AI Skills Academy offers specialised courses, apprenticeships, and scholarships to boost diversity and attract talent. European Digital Innovation Hubs provide accessible AI training to support workforce upskilling.

Strategic Partnerships Accelerate Talent Development

Forming partnerships with educational institutions and technology firms can help banks address talent shortages and skill gaps. Collaborations enable the creation of training programs aligned with industry needs.

• BNP Paribas partners with AI startups and invests in employee training through its Digital Data and Agile Academy.
• Lloyds Banking Group works with the University of Cambridge to train 300 senior staff in AI topics, including regulation, ethics, and generative AI.
• European Social Partners collaborate to ensure responsible AI adoption that supports employee well-being.

Such partnerships also help banks adopt new technologies faster while managing risks associated with being early adopters.

Infosys emphasizes cross-functional collaboration, with over 270,000 employees familiar with generative AI across many roles. This diversity fosters innovation and prepares institutions to lead confidently in AI adoption.

Digital Transformation: Key to Growth and Efficiency

This year is critical for European banks. Those with effective digital strategies will expand AI and cloud capabilities, improving operational efficiency and customer experience. This will help attract and retain customers and strengthen market position.

Challenges around data privacy, security, and regulations remain. Banks that balance innovation with risk management and invest in continuous training and collaboration will become more resilient.

For finance professionals interested in enhancing AI skills and staying ahead, exploring targeted AI courses can provide practical knowledge and tools. Resources such as Complete AI Training’s job-specific courses offer actionable learning paths tailored to financial services.