In a recent Capgemini report, it was revealed that nearly two-thirds of financial services firms have embraced artificial intelligence (AI), with plans to integrate it across their entire value chain within the next two years.

The report emphasizes the crucial role of implementing cloud solutions at scale to fully leverage the value of AI investments. Financial institutions have experienced limited impact from AI due to the slow adoption of cloud technologies, with half of banks and insurers yet to transition their core business applications to the cloud.

While 91% of banks and insurance companies have initiated their cloud journey, the report underscores that a significant portion has only migrated a minimal fraction of their core business applications. This challenges the effective adoption of cloud solutions at scale.

Capgemini Industry Platform Leader for Banking India, Anuj Agarwal, highlighted the need for prioritizing cloud adoption to unlock the potential of AI and Gen AI. He stated, "Today, we see FinTechs specializing in numerous areas that leverage AI to add significant value to banks."

The report also sheds light on India's promising position in the AI landscape, citing high skill penetration, significant investments, and growing demand for AI solutions. Agarwal expressed optimism about India's fintech revolution, attributing it to the government's push towards a digital India and the abundant availability of data.

Discussing the challenges faced by banks, Agarwal emphasized the importance of enhancing customer experience and operational efficiency to meet evolving expectations. He stated, "Through our research, we found that banks are generally struggling to offer clients the desired value and personalization that they seek."

In wealth management, the report notes a 60% preference for cloud-enabled fraud detection techniques, while 39% of retail banking executives aim to transition complex credit risk management to the cloud. The shift towards cloud-based scalable platforms is seen as a key enabler for this transformative journey.

The insights in the report are based on global data gathered from two primary research surveys and 30 interviews with financial service executives across 20 countries and 14 markets, including the United States, Canada, the UK, France, Germany, Spain, the Netherlands, the United Arab Emirates, Singapore, Hong Kong, Japan, China, India, and Australia.