Artificial Intellingence (AI) is set to drive global banking sector profits up by US $ 170 billion by 2028, a new report by Citi Group has found. 

Forecasted through a client survey, the report predicted that AI will profoundly change the future of finance, potentially boosting global banking profits to US $ 2 trillion over the next five years.  

The figure represents a 9 percent increase in the profit pool for the sector. 

“Just as the steam engine powered the industrial revolution, AI may commoditize human intelligence. Finance, a data rich industry with clients adopting AI at pace, will be at the forefront of change” the Citi Group said in a statement. 

93 percent of  respondents of the Citi Groups proprietary survey expected higher bank profits through productivity gains, signaling the overwhelming optimism of finance sector leaders about AI’s profit impact.  

The higher productivity is expected through the automation of routine tasks, streamlining operations and freeing up employees to focus on higher value activities. 

GenAI will have a big impact on internal facing tasks such as content and information management, coding and software, the report stated. 

However, emphasis was also placed on the challenges and ethical considerations that may arise through the global shift to a bot-powered finance industry. 

Despite the higher productivity, AI generated finance activities could raise serious questions around data security, regulation, compliance, ethics and competition, according to the report. 

AI models are known to hallucinate and create non existent information bringing both operational and reputational risks to finance firms, if the AI chatbots were to go fully autonomous.  

Intensified price competition by AI-powered clients could also shift the balance of power in the finance world. 

Moreover, AI may be adopted faster by digitally native, cloud-based firms such as FinTechs and BigTechs, leading to the loss of market shares for many other incumbent firms burdened by tech debts. 

Accordingly, the Citi Group advised finance leaders to practice caution around timelines, talent costs, heightened competition, rising client expectations and expenses related to greater AI activity.