LEARNER · GLOBAL
Prompt caching: reusing AI model outputs to cut latency and cost in production
**Prompt caching** is a technique where an AI system stores and reuses portions of a conversation or document that don't change, so the model doesn't re-process the same text every time a user asks a new question. Think of it like a cache in a web server—if a bank analyst asks 10 questions about the same risk report, the AI reads that report once and caches it, then answers the 10 questions faster and cheaper. Critical for cost-sensitive BFSI apps (compliance reviews, underwriting).
WHY IT MATTERS
Reduces per-query cost and latency for high-volume LLM deployments; enables banks to run AI on longer documents (full contracts, regulatory filings) without per-token explosion.