Banks bet big on GenAI—but data doubts linger, Temenos study shows

By Puja Sharma

Banks are increasing their investment in GenAI but remain concerned about data privacy, legal requirements and accuracy

Temenos, a banking technology firm, shared insights from a worldwide survey conducted by Hanover Research, which gathered perspectives from 420 business and technology leaders in financial services on the transformative impact of Generative AI (GenAI) in banking.

Three quarters (75%) of banks are exploring GenAI deployment according to a new survey commissioned by Temenos, a global leader in banking tech, which works with nearly 1,000 banks worldwide.

Conducted by Hanover Research, the survey – which was fielded in February amid a period of uncertainty over tariffs and the state of the economy – showed that despite the challenging backdrop, financial firms are pressing forward with plans to invest in advanced tools that offer the potential for increased productivity and revenue generation and a more efficient workforce. Among banks already deploying GenAI nearly half (43%) plan to increase their investment in AI technology compared to last year. 

Improving operating efficiency is the most common reason banks are considering using GenAI. Banks are also considering using GenAI to improve customer experience and drive business growth.

Isabelle Guis, Chief Marketing Officer, Temenos, said: “This survey highlights both the enthusiasm and challenges banks are facing as they explore GenAI. There’s huge potential for GenAI to enhance efficiency, address operational challenges, and elevate the customer experience. However, concerns around data privacy, legal requirements and accuracy remain top of mind. GenAI is not a silver bullet—banks also need to balance a human touch in the process to ensure that interactions remain differentiated and build trust with their customers. At Temenos, we’re helping financial institutions navigate this evolution with secure, scalable, and responsible AI solutions.”

With flexible deployment options, Temenos enables banks to run its GenAI solutions across cloud, SaaS, or on-premises infrastructure. Temenos is working closely with the leading hyperscalers and recently announced a collaboration with NVIDIA to power on-premises GenAI. This collaboration provides banks with exceptional speed and precision in delivering AI-driven services while ensuring privacy and control. Additionally, Temenos has been rolling out internal AI-driven initiatives to enhance productivity and streamline operations.

Key Highlights:

• Three-quarters (75%) of banks are exploring Gen AI deployment, with 36% having already deployed or in the process of deploying it, while another 39% are considering opportunities for deployment.
• Among banks already deploying GenAI or exploring opportunities, nearly half (43%) plan to increase their investment in the technology this year compared to last year.
• Despite its promise, most (86%) banks have data protection concerns with GenAI. Additionally, over half cite concerns with legal requirements (60%) and hallucinations—instances where GenAI provides inaccurate results (59%).
• Looking ahead, 73% of respondents agree that Agentic AI—AI systems capable of making decisions and taking actions independently—will transform banking.