The Future of Banking: AI, Personalization, and the Audience of One

The banking industry as we know it is changing. While digital banking has reshaped the way customers interact with financial institutions, the next phase insists on an even more personalized experience; one that caters to the individual needs of each customer in real time.  

A major factor driving this change is artificial intelligence (AI), enabling banks and credit unions to move beyond brick and mortar and even what we know now as digital banking. With AI, financial institutions can provide hyper-personalized solutions that foster trust, improve the customer or member experience, and stimulate operational efficiency.  

A New Banking Experience 
When we reflect on the evolution of banking, financial institutions relied heavily on mass marketing to reach their ideal customers and members. But we know what works for some may not work for many. AI makes it possible to transition from generic, broad marketing messaging to a more tailored approach. Financial institutions of any size can leverage AI-powered insights to analyze user behavior and preferences, offering personalized solutions that customers and members expect.  

Beyond improving the user experience, AI is propelling efficiency resulting in significant cost savings. It helps to automate routine tasks, freeing staff up for other initiatives, improving efficiency and reducing expenses. AI enhances security by detecting unusual activity in real time, reducing losses to the financial institution. Finally, AI chatbots are capable of managing routine inquiries and reducing call center volume.  

Addressing Consumer Concerns 
Many recent studies* prove that consumers are open to AI-driven experiences in banking, though they tend to prefer certain features over others. Practical applications such as fraud monitoring, financial goal setting, and real-time alerts and updates are among the most favored AI solutions amongst all ages. While younger consumers are more receptive to AI in banking, regardless of age, customers and members also want the option to speak with a live person when addressing more complex issues.  

Prioritizing consumer concerns is important when addressing AI and banking. Clear communication and transparency regarding AI capabilities and functionality, such as preventing fraud and protecting their money, can help facilitate understanding and buy-in when leveraging AI-driven solutions.   

Moving Forward 
A well-defined digital strategy is paramount to successfully integrating AI into your bank or credit union product road map. Begin by evaluating goals and identifying solutions that enhance operational efficiency and the customer and member experience. Prioritize and plan for the tools to implement first. Start small. Consider beginning with AI solutions for fraud detection or enhancements that bolster customer support and gradually expand the strategy as data-driven decisions can be made. Of course, all of this cannot be done without the help of your technology vendors.  

With AI becoming a critical driver of success, banks and credit unions [and their customers and members] will increasingly expect advanced AI-powered solutions from their technology vendors. Competitive vendors and true partners are continually enhancing their offerings to meet the market’s growing needs. Open communication and full transparency between the bank or credit union and their vendor(s) is table stakes when it comes to improving efficiencies and meeting user expectations. Knowing how AI is integrated into their platforms, what future innovation is planned, and how the technology remains compliant with industry regulations is the responsibility of the financial institution employing the technology. Don’t forget to seek guidance when needed.  

Collaborating with a consultant provides valuable insight into navigating and implementing AI products and services and vendor negotiations. A consultant can help financial institutions assess their strategy, identify the right solutions, and ensure vendors deliver technology that meets their needs.  

Like death and taxes, AI is becoming a certainty when it comes to financial institutions looking to survive and thrive. By embracing it thoughtfully and offering transparency, financial institutions can create a future where every customer and member feels like they are an ‘audience of one.’  

Sources: 
*https://www.businesswire.com/news/home/20240613394163/en/44-of-U.S.-Consumers-Are-Open-To-AI-in-Banking%E2%80%93With-A-Few-Caveats **https://www.customerexperiencedive.com/news/customers-dont-trust-ai-hurt-business/727141/ 
**https://www.bankingdive.com/news/ai-banking-customer-concerns-transparency/728441/