When a regional bank decides to replace its credit analysts with a generative AI model to pre-process SME loan applications, the topic is no longer theoretical. In 2024, the banking and financial sector is experiencing an operational shift on several simultaneous fronts: industrial deployment of artificial intelligence, new European regulatory requirements, and increased pressure on climate risk management. These trends are reshaping how banks operate on a daily basis, well beyond mere announcements.
Digital Operational Resilience: What DORA Changes for Banks in 2024
The European regulation DORA (Digital Operational Resilience Act) is entering its phase of concrete application. For the IT and compliance teams of banks, this translates into a heavy undertaking: mapping all ICT service providers, testing the resilience of systems against cyberattacks, and documenting each incident in a standardized manner.
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This is about a change in internal culture. European authorities (EBA, ESMA, EIOPA) will publish detailed guidelines on ICT and cyber risk management in 2024. Digital resilience is becoming a full-fledged prudential undertaking, not just a simple sub-chapter of compliance.
What complicates implementation is the banks’ dependence on concentrated cloud providers. When three or four providers host the majority of the sector’s critical infrastructures, an incident at one of them can paralyze several institutions simultaneously.
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DORA requires mapping these dependencies and planning exit strategies, an exercise that many players are discovering. To keep up with the evolution of these regulatory topics and their impacts on financial services, a useful resource is https://www.banque-et-finance.fr/, which continuously covers these issues.
Generative AI in Banks: From Pilot to Industrial Production
Most articles on banking trends mention AI in vague terms. On the ground, the reality of 2024 is more precise: several large groups are moving from experimentation to budgeted deployments over several years. JPMorgan, HSBC, Morgan Stanley, and Deutsche Bank have structured internal programs with dedicated governance committees (AI councils, AI risk committees).
Specifically, we observe three use cases that are moving beyond the pilot stage:
- Assistance to customer advisors, where the model prepares a summary of the client file before the meeting, significantly reducing preparation time
- Credit risk analysis, with models that pre-score SME financing applications and flag documentation anomalies
- Automated production of regulatory documents, particularly prudential reports, the volume of which continues to increase
The real issue is not technological but organizational. AI governance in banking requires human validation processes at every step. A model that hallucinates on a solvency ratio poses a direct regulatory risk. Banks that move quickly are those that have established quality control loops even before deploying.
What This Changes for Risk Teams
Risk analysts are not disappearing, but their roles are transforming. Where hours were once spent compiling data, the work is shifting towards supervising model outputs and validating edge cases. Feedback on this point varies depending on the size of the institution: large universal banks have the means to structure this transition, while mid-sized players are proceeding more cautiously.
Climate Risks and Prudential Requirements: Pressure Mounts on Balance Sheets
European supervisors are tightening their expectations regarding the integration of environmental risks into banking management. In 2024, it is no longer just about extra-financial reporting: climate stress tests are becoming a recurring exercise imposed on significant institutions.
For finance departments, this means recalculating the exposure of their loan portfolios to high carbon intensity sectors. A commercial real estate portfolio concentrated on poorly energy-rated buildings now represents an identified prudential risk, not just a reputational risk.
Green Loans and Sustainable Financing: Beyond the Label
The green loan market is progressing, but with an increasing demand for traceability. Borrowers must document the use of funds, and banks must verify that the financed projects actually meet the criteria of the European taxonomy. This verification process adds complexity to the credit instruction chain.
For companies seeking green financing, the direct consequence is an extension of processing times and a more extensive documentation requirement. Sustainable financing imposes a documentary rigor comparable to regulated loans.
Payments and Open Banking: What’s Changing in Business Services
Instant payments are becoming widespread in Europe, and account information services (AIS) related to open banking are changing how creditors assess creditworthiness. Rather than relying solely on declarative data, a lender can access (with consent) the actual transactional history of the applicant.
For SMEs, this is a concrete change: a company with a solid banking history but little traditional collateral can access credit more easily. Account information services allow lenders to verify cash flow health in real-time, accelerating decisions.
- Real-time payments reduce the need for working capital for businesses that bill in B2B
- Account aggregation via open banking simplifies multi-bank cash flow tracking
- Bank APIs enable the integration of financial services directly into business management tools
The banking and financial sector in 2024 is transforming less through major visible breaks than through an accumulation of regulatory constraints and technological efficiency gains. DORA, industrialized generative AI, climate risks integrated into balance sheets: these trends converge towards a more regulated and automated sector, where the ability to structure internal processes makes the difference between advancing institutions and those that lag behind.