• “One of the most promising methods to improve profitability is to apply advanced analytics (AA) and artificial intelligence (AI) to better manage nonpersonnel costs. In our experience, such costs account for more than 40 percent of overall expenses at the typical European bank.
• they have reduced expenses by 10 to 15 percent on average across cost categories—and up to 35 percent in certain categories.
• Fact-based negotiation. A bank used a highly analytical “should cost” tool to optimize the prices paid to vendors for software development. Armed with detailed cost breakdowns based on cost-prediction algorithms, specific project schedules and constraints, type of delivery, benchmarks, and other variables, the bank negotiated with vendors to reduce their prices by 10 to 30 percent.
• Demand management. Another bank analyzed the annual number of cash-transfer trips per ATM in relation to the ATM-specific cash stock balance. The analysis revealed a low-to-medium correlation between the number of trips and the cash balance. These findings allowed the bank to run simulations to find the optimal cash stock balance for every ATM cluster (rather than a single blanket balance threshold). The optimal ATM-specific balance reduced the amount of money in stock and the total number of shipments of cash to ATMs, resulting in 14 percent savings on cash-in-transit costs”

https://www.mckinsey.com/industries/financial-services/our-insights/a-new-frontier-for-transforming-nonpersonnel-cost-management-in-banking?cid=eml-web

• “As noted by Business Insider, 56 percent of banks have implemented AI in risk management, and 52 percent use these tools for revenue generation from new products and services.
• While 74 percent of banking executives say these technologies will transform the industry, they’re worried about barriers to effective deployment, such as growing skills gaps and increasing complexity.
• Overcoming Hurdles to AI Deployment in Banking:
  • Multiple stakeholders
  • Myriad processes
  • Siloed data
  • Managing current infrastructure”

https://biztechmagazine.com/article/2021/09/overcoming-key-challenges-ai-deployment-financial-services