US Banks Prioritise AI for Cost Savings

US banks expect artificial intelligence to deliver greater benefits through cost reduction than through revenue growth over the next two to three years, according to a survey conducted by D.A. Davidson.

Banks surveyed projected that AI adoption could reduce expenses by an average of 4.5% to 5%, while generating revenue growth of approximately 2.5% to 3%. This suggests that expected expense benefits are nearly twice the size of the anticipated revenue opportunity.

Larger banks expect stronger gains from AI. Institutions with more than $50 billion in assets forecast an average expense reduction of 5.6%, compared with expected revenue growth of 3.1%.

Most of the 73 survey respondents identified operational efficiency as the main reason for investing in AI. Current use cases are focused largely on activities that can be automated or streamlined, including Bank Secrecy Act compliance, call-centre operations and other back-office processes.

The findings indicate that banks may use AI not only to reduce direct operating costs but also to limit future staff expansion and redeploy employees towards revenue-generating functions.

This could allow institutions to shift resources from administrative and cost-centre roles towards customer acquisition, relationship management and other business development activities.

However, the financial impact of AI will depend on implementation costs, data quality, model governance, cybersecurity and regulatory compliance. Banks will need to ensure that automation does not weaken human oversight or create new operational and compliance risks.

The survey reflects a practical approach to AI adoption in banking, with institutions initially focusing on measurable efficiency gains before expecting significant revenue growth.