Artificial Intelligence (AI) is on a transformative journey. The next big thing in this field is agentic AI, an advanced technology with capabilities including autonomous decision making, continuous learning, adaptive workflows, and multi-step problem solving. Europe has witnessed a rapid growth in the adoption of enterprise agentic AI market, with revenues amounting to $634 million in 2024 and is projected to cross $5.5bn by 2030. Leading this growth are Germany, the UK, and France which collectively account for roughly 70% of the market. The European banking sector is embracing this trend, with back-office automation and fraud detection among its early applications.
Traditional automation, which is rule-based and static, is reaching its limitations, paving the way for agentic AI. This advanced technology is capable of handling multi-step workflows, optimizing complex, dynamic processes, and autonomously executing complex tasks in real time. For Europe’s financial services organisations, the arrival of agentic AI is timely, especially when they are facing increasing competition from fintech/big tech rivals and stringent regulatory environment.
How can banks benefit from agentic AI?
AI agents can be utilized in the back-office to carry out complex, repetitive tasks such as verifying documents, reconciling accounts, processing invoices, and posting journal entries autonomously. This can result in significant cost and time savings, while also reducing errors. Banks have reported a 25 to 40 percent improvement in loan approval speed and a 45 to 65 percent reduction in manual effort in areas like credit operations and trade finance processing, thanks to agentic AI.
Improved Risk and Compliance Management
Agentic AI can monitor financial transactions in real-time, identifying suspicious patterns early and triggering appropriate actions. Unlike traditional risk models, which mostly rely on historical information, agentic AI systems consider real-time market trends and other external data to dynamically adjust risk assessment, resulting in better risk prediction and management. This is particularly relevant for complying with Europe’s stringent regulatory mandates, such as GDPR and the EU AI Act.
Enhancing Customer Experience
Agentic AI can enable hyper-personalised customer experiences. AI-powered chatbots and virtual assistants can understand customer context, retrieve the right information, and perform complex tasks. By analysing customer information, they can recommend highly contextualized financial products and services. AI agents outperform routine personalisation tools by acting as personal financial concierges, autonomously performing tasks such as sweeping funds to better yielding accounts and rebalancing portfolios.
Innovating for the Next Generation of Consumers
The integration of gaming and finance, powered by gen AI, can help banks engage with younger, digitally native audiences. For example, AI-driven insights can enable banks to offer micro-investment products based on in-game spending behaviour, offer dynamic credit options for digital purchases, and design savings plans that reward financial discipline with virtual incentives.
The Way Forward
Agentic AI, although more advanced than traditional AI, also presents more complex implementation challenges. European financial institutions need to prepare for more than just technical integration challenges, from heightened data privacy and security risks to opaque “black-box” agentic AI systems to ethical concerns and talent shortages.
Banks in Europe, most of whom are still in the early stages of adoption, should proceed thoughtfully on the agentic AI journey. At the highest level, they may need to rethink operating models for agile development and cross-functional collaboration, and create an organisational culture that values rapid experimentation, continuous learning and customer-centricity. Next, they should create a comprehensive roadmap, covering strategic objectives, technical readiness, use-case prioritisation, model explainability and transparency, workforce upskilling, and change management. Banks should take these decisions within a Responsible AI framework to unlock value from agentic AI in a secure, compliant and ethical manner.
Jay Nair, EVP, Industry Head, Financial Service and Public Sector, Infosys
This article is based on an original piece by Jay Nair, featured on Retail Banker International. Find the original article Here.
