Banks shift AI focus as back-end tools drive ROI, research reveals

By Puja Sharma

GFT’s Report Reveals 68% of AI-Generated ROI is Coming from Banks’ Back Office Capabilities, Not Consumer-Facing Tools

AI has become a top investment area for the majority of Canadian banks, consumer-facing delivers is coming from an unexpected place, according to a new report released today. Part 1 of the two-part Banking Disruption Index from global AI and digital transformation company GFT finds that while 99% of banks are placing focus on consumer-facing AI solutions, only 32% have seen significant return on investment from those efforts. Instead, the most impactful AI deployments are happening behind the scenes, with 68% of banks citing internal capabilities as the greatest value driver.

According to GFT’s report, the top area that AI is benefiting banks is in security with the automation of internal fraud detection and cybersecurity monitoring (45%). With banks already spending 35% of their IT budgets on AI – and planning to increase that figure by 20% over the next five years – banks may need to shift where their AI focuses lie to drive maximum productivity and revenue in order to compete in an increasingly saturated market.

While customer facing AI capabilities should be a consideration in financial institutions’ broader AI transformation is essential to scaling in the future as AI continues to evolve. The Banking Disruption Index reveals that banks are aligned with this ideology, with the number one goal they want to achieve with AI being operational efficiency. However, more than half (68%) are still currently focused on AI-driven customer service. The report highlights key areas where this is evident and where challenges remain:

• Investment banks are finding some value in front-office AI, but the real opportunity is with internal operations. While 76% are using AI for customer service and 42% are investing in personalised banking and marketing, only 26% have seen meaningful ROI from customer support automation—and none from personalisation efforts. Although only one-third have implemented AI in internal operational functions, the 58% that have, say those back-office applications are delivering the greatest value.
• Retail banks are prioritising customer experience, but those AI investments aren’t yet performing. Most retail banks (67%) have invested in AI to improve customer service, yet only 18% report seeing measurable results. While 28% of retail banks cite customer experience as a top priority, only 37% report high satisfaction with their current AI offerings. In contrast, nearly two-thirds have seen significant return from back office capabilities like cybersecurity monitoring and automating administrative tasks.
• Nearly every bank across all sectors have seen measurable return on AI investments, but some challenges remain. 99% of banks reported significant ROI on their AI investments in some capacity– though most did note some hurdles with widespread adoption. Cybersecurity (49.5%) and data privacy (37.5%) were listed at the top concerns, followed by high implementation costs (32.5%), a lack of skilled personnel (29%), and legacy IT infrastructure (27%). 21% did admit there was lack of clarity around ROI.

“The continuing evolution of AI technology presents a world of opportunity to banks, but in order to effectively harness that power, the institutions first need to understand where exactly in their business AI will be the most beneficial,” said Andre Gagne, CEO of GFT Canada. “What we are continuously seeing through our on the ground work with financial institutions is that in order for banks to stay competitive, operational excellence is key. While customer-facing tools are a great way to improve relationships, to truly see gains that impact the bottom line, banks should turn their focus inward to their day to day processes.”