If you read the headlines, you might think the banking sector is drowning in AI hype.
Every week, a major bank announces a new "GenAI Assistant" or a partnership with a tech giant.
But when you look under the bonnet, is anything actually changing? Or is this just Innovation Theatre?
The short answer: No, it is not overhyped.
In fact, most banks have yet to grasp the sheer enormity of what is coming.
1. The "Paper on Glass" Problem
Most banks think they are digital because they have a mobile app.
They aren't. They have simply taken a 1980s paper process and put it on a screen. We call this "Paper on Glass".
If your "AI strategy" is just adding a chatbot to a broken, siloed process, you aren't transforming. You are just frustrating your customers faster than before.
2. The Data Trap
AI eats data. That is its fuel.
The problem is that most banks don't have a data ecosystem; they have a data graveyard.
Customer data is locked in legacy mainframes, separated by department (mortgages, current accounts, loans).
You cannot build a predictive, personalised AI engine if your data is trapped in concrete silos.
Until banks fix their data architecture, their AI will be hallucinating, not helping.
3. The Real Threat (It’s Not Efficiency)
Banks are obsessed with using AI for Efficiency (cutting costs in the back office).
That is the "Optimiser" trap again.
The real threat isn't that your competitors will have cheaper back offices. The threat is that a FinTech or Big Tech player will use AI to understand your customer better than you do.
- They will predict financial distress before it happens.
- They will offer micro-loans before the customer even applies.
- They will price risk dynamically, not statically.
4. The Wake-Up Call
We are moving from an era of "selling financial products" to "delivering financial outcomes".
AI is the engine of that shift.
If you think this is hype, you are looking at the wrong horizon. The tsunami is coming, and a chatbot won't save you.
The Bottom Line
Stop playing Innovation Theatre.
Fix your data.
Because if you don't, someone else will fix your customer's problem for you.