LEARNER · GLOBAL
What is RAG (Retrieval-Augmented Generation) and why banks are building it into LLMs
RAG is a technique that feeds a language model live, external data (e.g., current interest rates, account balances, regulatory filings) before generating a response. Unlike a vanilla LLM that relies only on training data, RAG ensures answers stay fresh and factual.
WHY IT MATTERS
Banks deploy RAG to ground AI chatbots in real-time compliance rules and product terms, reducing hallucination (false outputs) and regulatory risk.