Artificial intelligence in banking offers major opportunities but comes with significant risks. Financial institutions use AI to improve efficiency, reduce costs, fight fraud, and enhance personalization, but challenges include poor data quality, misinformation, bias, security threats, and consumer mistrust. Studies show 77% of organizations face data quality issues, and AI hallucinations occur up to 27% of the time. Privacy breaches and bias in decisions also raise regulatory and ethical concerns. Despite this, AI can unlock $1 trillion in value annually, expand financial inclusion, enhance fraud detection, and deliver personalized insights at scale.

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