Coverage: weekly note · Information to 3 March 2025
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TGB Weekly Research Note · 3 March 2025
Bank disclosures and a Bank of England and FCA survey show generative AI entering everyday staff tools; the FSB finds operations and compliance, not new revenue, the main focus of AI use.
The desk view
Generative AI at the largest banks has moved beyond the laboratory, but mainly inside the firm. Morgan Stanley said in June 2024 that 98% of its financial adviser teams had adopted its generative AI assistant, and UBS has cited a roll-out of 50,000 Microsoft Copilot licences. Citi says generative AI tools are available to employees within parts of the company. The Financial Stability Board finds that most AI use cases in finance focus on internal operations and regulatory compliance, with new revenue streams not widely observed. Our reading is that the next phase will be decided less by model capability than by control: third-party concentration, explainability and model validation.
From pilots to staff tools
The clearest evidence of production use comes from tools that sit beside employees rather than customers. Morgan Stanley fully rolled out its AI @ Morgan Stanley Assistant in September 2023, and 98% of Financial Advisor teams had adopted it by 26 June 2024. That day it added Debrief, an OpenAI-powered tool that, with client consent, takes meeting notes, drafts a follow-up email and saves a note into Salesforce. UBS told investors on 4 February 2025 about its roll-out of 50,000 Microsoft Copilot licences to employees.
Other disclosures are more cautious. JPMorgan Chase said in April 2024 it had over 400 predictive AI and machine learning use cases in production in areas such as marketing, fraud and risk, but described generative AI as something it was exploring in software engineering, customer service and operations. Citi's 2024 Form 10-K says it has more recently begun using generative AI. HSBC's 2024 annual report points to onboarding, know-your-customer checks and credit applications as targets for AI-driven efficiency, alongside a scaled roll-out of coding assistants. Bank of America's client-facing AI-driven assistant, Erica, recorded 676 million client interactions in 2024.
Selected large-bank AI disclosures
| Bank | Disclosure | Reported scale or scope |
|---|---|---|
| Morgan Stanley | AI @ Morgan Stanley Assistant, June 2024 | 98% of adviser teams |
| UBS | Microsoft Copilot roll-out | 50,000 licences |
| JPMorgan Chase | Predictive AI/ML use cases in production | Over 400 |
| Bank of America | Erica client interactions, 2024 | 676 million |
| Citi | Generative AI tools for staff | Parts of the company |
| HSBC | Coding assistants | Scaled roll-out |
Source: Morgan Stanley, Morgan Stanley Wealth Management Announces Latest Game-Changing Addition to Suite of GenAI Tools (press release), 26 June 2024; UBS Group AG, Fourth quarter 2024 results: speeches and analyst Q&A transcript (Form 6-K), 5 February 2025; JPMorgan Chase & Co., Annual Report 2023 (Letter to shareholders from the Chairman and CEO), 8 April 2024; Bank of America, Digital Interactions by BofA Clients Surge to Over 26 Billion, up 12% Year-Over-Year (press release), 24 February 2025; Citigroup Inc., 2024 Annual Report on Form 10-K, 21 February 2025; HSBC Holdings plc, Annual Report and Accounts 2024, 19 February 2025.
Operations first, compliance next
The Bank of England and FCA survey published on 21 November 2024 drew 118 responses; 75% of firms already use AI, up from 58% in 2022, and international banks, reporting on their UK operations, reached 94%. Foundation models make up 17% of all use cases, and operations and IT account for around 30% of them. The large UK and international banks reported median counts of 39 and 49 use cases respectively, against nine overall.
Compliance comes next. Today the most common uses are optimisation of internal processes (41% of respondents), cybersecurity (37%) and fraud detection (33%). Over the next three years a further 32% expect to apply AI to regulatory compliance and reporting. Internationally, the FSB notes new generative AI uses such as document summarisation, information retrieval and code generation, while many institutions appear cautious.
Additional firms expecting to use AI within three years, %
The control burden moves to the second line
Moving into production shifts risk from the project team to the control functions. A third of AI use cases in the UK survey are third-party implementations, and in risk and compliance the share reaches 64%. The top three model providers account for 44% of named model providers, against 18% in 2022. Almost half of firms (46%) report only partial understanding of the AI they use, largely because of third-party models. The FSB lists third-party concentration, cyber risk and model risk among the AI vulnerabilities that could increase systemic risk, and warns that hallucinations complicate assessment of model outputs.
Banks are responding through model risk management. HSBC says it is enhancing its independent model validation framework for generative AI techniques, and Citi warns that faulty deployment could produce inaccurate or incomplete output. Regulation adds a timetable: the EU AI Act's prohibitions on certain practices have applied since 2 February 2025, and AI systems that assess the creditworthiness of individuals are classed as high-risk. For bank executives, the practical implication is that the scarce resource is no longer access to models but the validation, vendor oversight and audit capacity needed to run them at scale.
What to watch
- 2 August 2025: EU AI Act obligations for general-purpose AI models (Chapter V) apply.
- 2 August 2026: EU AI Act applies generally, including rules for high-risk creditworthiness systems.
Primary sources: Financial Stability Board, The Financial Stability Implications of Artificial Intelligence, 14 November 2024; Morgan Stanley, Morgan Stanley Wealth Management Announces Latest Game-Changing Addition to Suite of GenAI Tools (press release), 26 June 2024; UBS Group AG, Fourth quarter 2024 results: speeches and analyst Q&A transcript (Form 6-K), 5 February 2025; Bank of England and Financial Conduct Authority, Artificial intelligence in UK financial services - 2024, 21 November 2024; Citigroup Inc., 2024 Annual Report on Form 10-K, 21 February 2025; JPMorgan Chase & Co., Annual Report 2023 (Letter to shareholders from the Chairman and CEO), 8 April 2024; HSBC Holdings plc, Annual Report and Accounts 2024, 19 February 2025; Bank of America, Digital Interactions by BofA Clients Surge to Over 26 Billion, up 12% Year-Over-Year (press release), 24 February 2025; European Union (Official Journal), Regulation (EU) 2024/1689 (Artificial Intelligence Act), 12 July 2024.