The financial sector is exploring the potential of generative AI, a type of artificial intelligence that can generate new content such as text or images. While generative AI offers significant benefits, it also introduces new challenges and risks that financial institutions must consider, including hallucination, which refers to the generation of inaccurate or fictional information. To mitigate these risks, financial institutions must adopt a strategic and comprehensive approach to generative AI, incorporating various aspects of technology, data, ethics, and organizational readiness. This may involve using techniques such as retrieval augmented generation, vector search, and data quality checks to ensure that generated content is accurate and reliable. Additionally, financial institutions must address concerns around security and privacy, implementing robust cybersecurity measures to safeguard AI models and the data they rely on. By taking a measured approach to generative AI, financial institutions can harness its potential to enhance customer experiences, improve operational efficiency, and drive business growth.