Jake Villiers, KAM & BFSI Expert at Infobip
Artificial intelligence (AI) is reshaping financial services as we know it—and customers are at the heart of this transformation. Personalised banking, faster service, better fraud detection, and smarter investment options are just the beginning, with even more advancements expected in 2025. With reports estimating a collective revenue growth of $100 billion annually if financial services reach the highest level of digital maturity in the next ten years, the opportunities that AI and new advancements bring is endless.
The transformation is already well underway. Around 75% of financial services organisations have adopted AI, with another 10% planning to follow within the next three years, according to the Bank of England. By analysing customer data and uncovering insights, these firms are creating tailored products, streamlining services, and enhancing security measures to address evolving customer needs.
Conversational banking, which emerged less than two years ago, has forced traditional banks to be more aggressive in terms of adopting new technologies to meet changing customer demands. AI and chatbots are used to streamline and personalise daily banking activities like money transfer, checking account balances, or even paying bills. By analysing customer data and uncovering insights, these firms are creating tailored products, streamlining services, and enhancing security measures to address evolving customer needs.
What are some ways financial institutions can leverage AI to keep their customers engaged and loyal?
Make it personal
While customer preferences are increasingly skewed towards digital solutions, they still value personalised and a meaningful relationship with their favourite brands – and banks are no exception.
If financial institutions want to maintain their competitive advantage, they must implement customer engagement strategies that maintains the human touch. Customers today now have many options at their disposal and will not hesitate to change banks if they are not fully satisfied with the CX of their financial institution. On the flipside, this means that customers who feel connected to their bank are likelier to remain loyal and even recommend the bank to other users.
Personalising communication to increase customer satisfaction must provide information and services that are relevant and useful. According to McKinsey, companies that manage to achieve this level of personalisation can increase revenue by up to 25%. Conversational banking enables banks to move towards hyper-personalisation, automation, and 24/7 availability, which can be leveraged to deliver seamless, personalised experiences while driving cost efficiencies and business growth, which are the main objectives of every bank.
Make it safer
The need to safeguard their online business has never been higher. A Statista report found that the global cost of cybercrime is forecasted to jump to US$23.84 trillion by 2027, up from US$8.44 trillion in 2022, creating a looming threat of financial losses for businesses.
The Economist found that almost 60% of banks use AI to prevent fraud, 54% leverage its potential to optimise IT operations, while others use this technology for digital marketing, risk assessment, and personalising the customer experience. One solution that can help financial institutions combat fraud is Fintech AI chatbots. They have evolved beyond support tools; they become personal finance coaches, offering bite-sized lessons on budgeting, debt management, or the basics of investing. Interactive quizzes and calculators can further enhance engagement. They can also analyse spending patterns and transaction data in real-time, and alert users to unusual activity to help prevent fraudulent transactions. Ultimately, the tool provides customers with instant answers, proactive guidance, and control over their financial lives.
Make it cost-efficient and effective
The banking sector cannot ignore the fact that personalisation engines and the automation of specific tasks will result in cost reductions that, according to Gartner, could reduce expenses by up to 20%. Improved accessibility can also save up to 5% in fraud costs.
As we approach 2025, banks must prioritise integrating new technologies like AI to enhance customer engagement and streamline operations. Embracing conversational banking meets the growing demand for digital solutions and strengthens customer relationships, leading to increased loyalty and advocacy.
Now is the time for banks to leverage these technologies to stay competitive, meet customer expectations, and drive growth. The future of banking is digital, and those who embrace this transformation will be best positioned to thrive in the years to come. Financial institutions can create a future where customers benefit from more personalised, accessible, and secure financial solutions, while also enjoying substantial benefits like reducing operational costs to increasing revenue through hyper-personalised experiences. While challenges remain, the potential for AI to revolutionise financial institutions —and improve our financial lives—is undeniable.
