Evident has released its latest AI Index – a ‘global standard benchmark of AI maturity for the banking sector.’

The report ranks 50 of the world’s largest banks across four critical pillars of their AI ecosystem: Talent, Innovation, Leadership, and Transparency of Responsible AI activities. The banking sector has seen increasing their AI investments to boost growth, productivity, and financial performance.

Businesses globally are increasing their AI investments to boost growth, productivity, and financial performance.

Companies that fall behind in this race risk becoming irrelevant in a fast-evolving market. The big question however, is the banking sector navigating AI?

The Evident AI Index was created to enhance transparency in commercial AI adoption, bidding to showcase best practices to help firms transform quickly and safely.

In an interview with Bloomberg, Evident CEO Alexandra Mousavizadeh gave a high-level over view of what makes a bank – as the interviewer stated – “good or not good at AI”, saying: “We look at the strength and the capability of the banks – all of the aspects that goes into a very strong ecosystem that moves a use case from ideation to production.

“A good bank is able to move through the system and identify problems where AI can be a solution, moving them into a test phase and into production of a use case.”

There’s a huge amount to unpack in this year’s Index, so we’ve tried to boil down the data to highlight key areas of AI investment, capability and talent within the global banking sector.

The Broad Strokes

The top four banks remain unchanged from the previous year, with JPMorganChase, Capital One, Royal Bank of Canada, and Wells Fargo leading the Index. North American banks dominate the top positions, holding seven out of the top ten spots.

However, other regions are catching up. Banks from Europe and the Asia-Pacific (APAC), such as CommBank and UBS, are rapidly improving. This is mirrored in the overall trend where 41 out of the 50 banks showed year-on-year score improvements, with NatWest (ranked #18) scoring higher than last year’s #10 bank. Yet, challenges remain for the lower-ranked institutions, as half of the bottom ten saw score declines.

Source: Evident AI Index Report

The average cost-to-income ratio for Index banks stands around 60%, down by 1.5% year-over-year. AI’s role in improving productivity could lead to a stronger correlation between a bank’s AI Index ranking and their cost-to-income ratio improvements.

Currently, 60% of banks that lowered their cost-to-income ratios either maintained or improved their AI Index rankings. While this correlation is modest, it signals a trend that may strengthen as AI technologies mature and banks generate clearer returns on their AI investments.

Advancing Through the AI Pillars

The report states that significant progress has been observed across the four key pillars of the Evident AI Index: Talent, Innovation, Leadership, and Transparency.

1. Talent and Innovation:
   • Gains in Talent and Innovation were more modest, at 2.7% and 8% respectively. This reflects the time it takes to recruit AI specialists, upskill existing staff, and develop new technologies.
   • JPMorganChase leads in both pillars, accounting for 35% of all AI researchers among the 50 banks. The bank’s comprehensive approach to AI research spans conferences like CVPR and NeurIPS, focusing on advanced topics like machine unlearning and federated learning.
   • Capital One shows strong momentum in AI talent density and is rapidly closing the gap in AI research contributions.
2. Leadership and Transparency:
   • There were substantial gains in these areas, with Leadership and Transparency scores increasing by 23.4% and 27.2%, respectively. This growth is driven by banks making AI initiatives more visible and strengthening communications around AI strategies.
   • Banks with lower starting positions made larger relative gains in Leadership and Transparency. For example, JPMorganChase maintained its lead in Transparency despite leadership changes, while Capital One saw its Transparency rank drop as it did not disclose key Responsible AI principles.

Is JPMorganChase A Case Study in Leadership?
JPMorganChase has topped the Evident AI Index for three consecutive years, driven by a well-rounded performance across all four pillars. The bank’s AI workforce constitutes 8.5% of the total AI talent in the Index, with a 16.1% year-over-year increase in headcount, adding more talent than rivals such as Wells Fargo.

AI research is a critical area for JPMorganChase, representing 35% of AI researchers across Index banks. The bank’s focus on Responsible AI is evident from its doubled output of research papers in this area, supported by contributions to open-source AI projects, which grew by 70%.

This comprehensive investment strategy appears to be paying off, with estimates placing the value of AI use cases at $1-$1.5 billion in 2024, projected to reach $2 billion by year-end.

Capital One’s Focus on AI Talent is Fast-tracking Growth
Capital One’s approach to AI stands out for its talent density, growing its AI workforce 1.6 times faster than JPMorganChase relative to overall headcount.

Although the bank’s AI talent pool is smaller than that of JPMorganChase, Capital One’s strategic investments in public cloud infrastructure give it an edge in agility, having migrated to Amazon Web Services by 2020. The bank’s AI initiatives are underpinned by recent academic partnerships aimed at promoting Responsible AI, yet it trails in Leadership and Transparency metrics compared to other top-ranked banks.

The bank’s $35 billion acquisition of Discover could complicate matters, potentially diluting AI talent density as 21,000 new employees join its ranks. Moreover, Capital One has yet to fully articulate its AI achievements or publish concrete measures of return on investment, areas where other banks are advancing.

Regional Analysis and Shifting Strategies
The report highlights a shift from bottom-up experimentation to top-down AI strategy execution among leading banks. While North America still dominates the Index, European and APAC banks are making significant inroads, especially in Leadership and Transparency.

APAC banks like CommBank climbed the rankings thanks to improved coordination of AI efforts, while European banks such as HSBC capitalized on increased visibility and external communications about their AI projects. The regional dynamic suggests a growing AI maturity beyond North America, potentially reshaping the competitive landscape in the coming years.

AI Talent & Innovation in the Banking Sector

The Talent pillar of Evident’s AI Index showed stability among the leading banks, with seven of the top ten retaining their positions and no changes within the top five ranks.

The top five banks are responsible for 26% of new profiles added to the AI talent stack in the past year, with a distribution across various roles: 50% in Data Engineering, 30% in AI Development, and 19% in AI-specific Software Implementation. Notably, these banks account for 37% of all talent profiles referencing Generative AI skills, which saw a fourfold increase compared to last year.

While UBS remains the only European bank in the top five, the rest are U.S. institutions that excel in Talent Capability. Conversely, banks in the bottom half show weaknesses in Talent Development, highlighting a contrast in strategic focus.

Only three banks – Capital One, JPMorgan Chase, and BBVA – exhibit balanced performance across Talent Capability and Talent Development, emphasising their commitment to long-term resource planning.

Overall, the AI talent pool across the banking sector has increased by 17% year-over-year, totaling approximately 70,000 workers in 200+ roles. Despite comprising only 3.7 million employees across 50 banks, the AI workforce’s growth is notable, particularly in AI-specific Software Implementation, which surged by 37%.

The growth of AI talent is uneven geographically, with U.S. banks generally leading in headcount across nearly every capability area, benefiting from larger sizes and economies of scale.

Top-Performing Banks in Talent Pillar

Source: Evident AI Index

European banks are notably increasing investments in talent development, with BBVA serving as a prime example. The bank has established a Data University, fostering learning for data professionals and engaging over 50,000 employees in data and AI training initiatives.

Additionally, it recently partnered with OpenAI to expand its curriculum to include Generative AI courses. Other banks, like BNP Paribas, Société Générale, and HSBC, are also implementing training initiatives to enhance AI knowledge among their employees.

Innovation

The Innovation pillar remains relatively stable, with nine banks maintaining their positions among the top ten performers. HSBC entered the top ten, surpassing Bank of America. Innovation in banking focuses on converting new ideas into tangible stakeholder value through improved products and services or increased efficiencies. This includes investments in AI-specific research, patents, and partnerships.

Top-Performing Banks in Innovation Pillar

Source: Evident AI Index

Research Output and Patent Activity

Over the past three years, 43 out of 50 banks published AI-specific research, with JPMorgan Chase accounting for 38% of this output. The concentration of AI research staff is also significant, with JPMC comprising 35% of the total headcount across the index.

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In terms of patents, the past year saw a 44.7% increase in AI-specific patents, driven primarily by Capital One and Bank of America, which together accounted for 60% of new filings. Additionally, HSBC, PNC, and Charles Schwab have recently filed innovative patents related to machine learning and fraud detection.

“This year, we’ve witnessed a sea change in how banks are executing on AI, moving from a handful of use cases in production to 300+
new applications coming into public view,” said Clare Barclay, CEO, Microsoft UK.

“The pool of AI talent shared by the 50 banks tracked in the Evident AI Index is up 17% year-over-year. References to AI found across annual reports, press releases, and company LinkedIn posts are up 59% year-over-year. And over half of the banks we cover are now detailing early business outcomes from their AI use cases.”