Generative artificial intelligence is proving its value in nearly every sector of the economy: in science and research, for simulations or the analysis of vast data sets. In IT, for software development. In mobility, for autonomous driving. In finance, for fraud detection, and in healthcare, for diagnostic support. The applications are wide-ranging. But the crucial question remains: where will AI applications first take hold on a large scale?

Services that require significant advice but for which customers have little willingness to pay are particularly ripe for disruption by AI. That applies to much of the business of retail banks. Many people feel helpless when it comes to managing their personal finances. The demand for advice is high. Yet the ability of retail banks to earn money from that demand is limited. The effort of visiting a branch and disclosing one’s financial situation to a stranger are additional hurdles customers often shy away from. Advice delivered through an AI agent offers huge opportunities, as it removes several of these barriers at once. The AI agent quickly becomes a trusted companion – always friendly, continuously learning, free of judgment (whether conscious or unconscious), and available around the clock. A 24/7 service once reserved for wealthy private banking clients could soon be offered to every customer. The familiar phrase „the customer is king“ takes on a new meaning with generative AI.

This may help explain why foreign banks such as BBVA or Chase are pushing into the German market with purely digital offerings. In a banking world increasingly shaped by technology, size matters more than ever. Developing and operating AI applications is costly, and scale is critical. The more customers on the platform, the faster it learns. The German banking market – which is highly fragmented – presents itself as fertile ground. Digital newcomers have already been able to gain market share quickly. At the same time, strong employee representation and often conservative management mean new technologies are adopted only slowly. Yet one thing is already clear: in the medium term, a retail bank without AI advisors has no future.