(Yicai) Dec. 1 -- Banks' business models will go through profound re-engineering via digital transformation, accelerated by artificial intelligence, the managing director of Boston Consulting Group in Singapore said to Yicai exclusively.

The all-around and systematic revamping of the banking industry will affect talents, capabilities, and the organizational system, Tan Yan said in an interview.

The essence of digitalization is deep insight based on the massive amount of data that is becoming more available and accessible in the digital age, per Tan. The banking sector needs to tap into the value of data by digital means. It should analyze this information for better customer service and operation, he added.

The customer acquisition cost of traditional financial institutions is increasing year by year so customer-centered and scenario-based marketing is key to solving the global problem, Tan said. The common business model of banks has changed from product-centered to user-centered by setting up a differentiated service system with corresponding standards and teams to match different customers, he added.

The next focus of digital transformation must be intelligence, Tan noted. AI has developed to a point of explosive growth considering maturity, awareness, and systems, he added.

This year, OpenAI's large language model ChatGPT has prompted people from all walks of life to explore AI. Generative AI is one of the key factors of financial innovation to improve customer service, customize financial advice, enhance market insights, strengthen marketing, and intensify risk control ability, per the consulting chief.

Chinese banks are boosting their investments in digitalization. Industry players' total investment in information technology is expected to reach CNY366.8 billion (USD51.4 billion) this year, an increase of 77 percent from 2020, according to iResearch.

Editor: Emmi Laine