30 May 2025
Generative AI is rapidly transforming the global technological and economic landscape, positioning itself as one of the most disruptive forces in decades. Unlike previous waves of digital innovation, generative AI does not simply support human activity. It can autonomously generate content, simulate decisions, and evolve based on interaction. For Europe, and particularly for the financial services industry (FSI), this represents a pivotal opportunity to enhance competitiveness, productivity, and resilience in a context of in- creasing global pressure.
To better understand the potential and implications of generative AI in Europe and for the financial services industry, TEHA Group in partnership with Microsoft launched a strategic research initiative titled “AI for Financial Services: The AI Revolution for a Strategic and Data-Driven Management of European Companies”. The project combined economic modeling, empirical analysis, and direct engagement with CFOs and senior financial executives from major European institutions to explore the economic, organizational and strategic impacts of generative AI adoption.
The Impact of Generative AI
The impact can be analyzed from two main points: increasing productivity within the same timeframe or maintaining current output while reducing working hours.
According to the model’s estimates, generative AI has the potential to boost Europe’s annual added value by €2.61 trillion, representing 15.2% of the region’s GDP. This impact is comparable to adding an economy nearly the size of France or surpassing the total value generated by the manufacturing sector in 2023 (€2.51 trillion). The potential for time savings is equally significant: generative AI could free up 47.6 billion working hours while sustaining current production levels, exceeding the total hours worked in Italy in 2023 (44.3 billion). The impact is especially notable in sectors like financial services and ICT, where AI can enhance productivity by over 20%.
The quantitative model shows two specular scenarios for the European financial services sector. On one end, generative AI could generate up to €147 billion in additional annual value added, equivalent to 0.9 percent of EU GDP. On the other, it could free up as much as 1.5 billion working hours per year through processing automation and increased productivity. The actual value will depend on how financial institutions integrate AI in their operations, whether they prioritize efficiency, innovation, or a combination of both. The majority of this potential lies within banking (€93 billion), followed by insurance sector (€28 billion), and financial support services (€27 billion), with the top five economies in the region capturing most of the benefits.
Financial services emerge as one of the industries with the highest potential impact, due both to the sector’s high degree of process standardization and its intensive use of data and knowledge work. But the impact is not limited to economic metrics. Generative AI triggers a structural evolution of the CFO function, positioning it as a key enabler of transformation. CFOs are moving beyond compliance and reporting to actively orchestrate forecasting, resource allocation, performance monitoring, and investor communication in real time.
Challenges
However, the road to large-scale adoption is still fraught with challenges. Many institutions remain stuck in the pilot phase, with fragmented initiatives and no unified governance. Key obstacles include limited integration between finance and IT functions, lack of internal capabilities, data quality gaps, and a widespread uncertainty around regulatory compliance and reputational risk, particularly in public-facing applications of AI. In many cases, the absence of clear business cases and shared accountability models limits the transition from experimentation to structured deployment.
The strategic dialogue with CFOs also highlighted the need for new organizational enablers. These include cross-functional leadership between finance, technology and legal teams, the institutionalization of AI-driven processes, investment in upskilling and AI literacy within finance teams, and the definition of common performance and risk metrics for AI initiatives. Without these conditions, the benefits of generative AI risk being limited to isolated use cases.
Conclusions
In an era where technology is deeply integrated into every aspect of our lives, the opportunities it offers are increasingly accompanied by rising levels of risk. While the European region holds a regulatory leadership position, through frameworks such as the AI Act, the Digital Operational Resilience Act (DORA), and the updated NIS2 Directive, it is crucial to ensure their effective implementation and continuous adaptation to emerging threats. The financial sector has experienced a sharp rise in cyber incidents, becoming the third most targeted sector in the EU, and the growing use of AI, while promising, also introduces new vulnerabilities related to data protection, unauthorized access, and non-compliant usage. To fully leverage AI-driven security measures, it is essential for companies to prioritize maintaining high standards of data quality and integrity.
The responsible adoption of generative AI in financial services will also depend on building trust, both internally and externally. Institutions will need to develop robust validation protocols, ensure transparency in AI-generated content, and align their internal practices with evolving regulatory frameworks. Security, privacy, explainability and model reliability must be addressed upfront to protect clients and reinforce credibility.
Looking forward, generative AI is not a short-term trend, but a foundational shift in how value is created, decisions are made, and finance is governed. For European institutions, acting now means securing a competitive edge not only in operational efficiency, but in strategic intelligence. Those who succeed in scaling responsibly, governing effectively, and aligning AI with business priorities will lead the transformation of the finance function and help drive the next phase of growth in the European economy.