Page 33 - Banking Finance July 2025

ARTICLE

Large Language

Models:

Revolutionizing

Banking through AI-

Sanjay Chawla
Powered Intelligence Union Learning Academy,
Chief Manager (IT)

Digital Transformation,
Mumbai

One of the most immediate applications of LLMs in banking is automated customer interaction.
Unlike traditional chatbots, which rely on rigid rules and often frustrate users, LLM-based assistants
understand natural language and respond in ways that feel genuinely conversational.

What is a Large Language Model? Why LLMs Matter to the Banking Indus-
A Large Language Model (LLM) is a type of artificial intelli- try?
gence that can understand and generate human-like lan- The banking and financial services industry has long stood
guage. Think of it as a very advanced computer program at the frontier of technological innovation-from early main-
that has read millions of books, websites, and documents frames to today's mobile banking platforms. The latest wave
so it can answer questions, write articles, help with emails, of transformation is being powered by artificial intelligence
answering questions, summarizing documents, writing re-
(AI), and in particular, Large Language Models (LLMs). These
ports, translating text, generating code and even carry on
AI systems, trained on massive volumes of textual data, are
conversations-almost like talking to a very knowledgeable
capable of performing a variety of language-related tasks
assistant.
that were once the domain of humans alone.
It doesn't "think" like a person, but it uses patterns in lan-
guage to respond in ways that often sound natural and From enhancing customer service to streamlining compli-
helpful. LLM use deep learning to understand and gener- ance and automating financial reporting, LLMs are rapidly
ate human language e.g. OpenAI's GPT-4 or Google's finding applications in the modern banking landscape. As
Gemini. banks navigate an increasingly digital, data-driven environ-
ment, understanding and leveraging the capabilities of
The core technology behind LLMs is based on transformer LLMs is becoming imperative for strategic advantage.
architecture, a deep learning model introduced by re-
searchers at Google in 2017. Transformers allow LLMs to The banking industry is uniquely positioned to benefit from
analyze and predict the relationship between words in a LLMs due to the following characteristics:
sentence (and across sentences), enabling nuanced under- Data-Rich Environments: Banks generate and manage
standing and generation of human-like language. enormous volumes of structured and unstructured data.

30 | 2025 | JULY | BANKING FINANCE