Kodex – Adopting Generative AI in Banking, 2024

The main theme of the report concerns the adoption of generative artificial intelligence (GenAI) in the banking sector.

The report examines how GenAI can transform the financial services industry by improving regulatory compliance, customer interaction, and risk management. High-quality systems are necessary to fully harness the potential of GenAI, and it is important to differentiate between various AI models. The report explains what makes an AI system high-quality, including data quality, system complexity, and cybersecurity measures. Tools such as Retrieval-Augmented Generation (RAG) and Parameter Efficient Fine Tuning (PEFT) are included to help reduce errors. A step-by-step approach to implementing GenAI is recommended, starting with simple tasks and gradually moving to more complex ones to ensure a smooth transition. Key recommendations for the industry include using standard test data, establishing fair usage policies, creating AI test environments (sandboxes), and simplifying regulations for more effective AI integration.