Artificial Intelligence: how banking could use AI to personalise your finances

Generative artificial intelligence (AI) will be used in next-generation banks to influence people’s financial decisions, spot potentially vulnerable customers, train call centre staff and even run social media accounts. According to Tom Merry, the head of banking strategy at Accenture, the complex technology could “touch almost everything that goes on at a bank”.

The UK banking industry has been using AI for years, such as through predictive models which detect fraud and analyse risks but more banks are starting to test the use of generative AI, where complex models can create something completely new based on a vast set of data. The tech is “exciting but scary” for bank bosses who are “wary” of its risks, said Mr Merry, who works with lenders on their transformation strategies.

But there have been more requests from banking firms who are keen to experiment with the tech as it has been cutting through into the mainstream with chatbots like ChatGPT and Google’s Bard.

This could mean using people’s personal spending and banking data to design a bespoke product for a customer, or “nudging” through online banking toward making small decisions to improve their financial strength.

It could also see banks experiment with voice recognition technology – meaning AI can pick up on the sentiment of a caller and potentially spot if they sound vulnerable or distressed, prompting staff to increase engagement.

Mr Merry has also suggested that generative AI can go as far as managing banks’ social media platforms, or training human resources and call centre staff such as through “avatars” to role-play interactions.

Peter Rothwell, KPMG’s UK head of banking, pointed out that customers will need to trust that their data is being used for the right reasons if generative AI is to be adopted more widely.

“The more a bank knows about you, the more help it can be in terms of helping you manage your key outcomes. But that requires trust, and data security, and reliability.”

For example, a bank receiving a credit card application from a customer could nudge them towards a short-term overdraft instead, using AI and based on what they know about their financial situation.

“In order to get to that point … I need to trust that they’ve got my best interests at heart, rather than theirs,” Mr Rothwell said.

But some research suggests that the banking industry still has a long way to go when it comes to engaging with customers, after a poll conducted by Eligible, an AI platform for banks, found that nearly a quarter of people in the UK said they had received no communication from their bank that was personalised to their financial situation, leading them to ignore it altogether.

Zahra Hassan, Eligible’s co-founder, said AI can be used to detect how well a person understands a financial product and therefore spot potentially vulnerable customers.

She said: “Based on this, we can start to form views on the likelihood that they could struggle to meet their payments. AI has the power to transform customer support from a reactive relationship to a proactive one.”

Britain’s largest high street lenders have axed hundreds of branches across the country as they shift toward mobile banking and research from KPMG UK found that about a fifth of UK consumers have not visited a bank branch in the past year, up from 14% in 2022.

Just 13% of respondents had visited a branch in the prior week when the survey was conducted last month, compared with 18% the year before, and just over a third of adults now consider an app that is simple to use as being the more important interaction they have with their bank, higher than the quarter who said so last year.