Author: Isa Goksu, CTO UKI at Globant
The financial services industry has always been at the forefront of digital transformation, driven by technological innovation, evolving regulations and the growing demands of digital-savvy consumers. But with Artificial Intelligence (AI), the industry is seeing an even bigger transformation, like we’ve never seen before.
Open banking is at the forefront of this revolution – a shift that is redefining how financial institutions operate and interact with their customers.
It is putting control back into the hands of the individual by allowing them to decide who accesses their financial data and when. This not only enhances data ownership and transparency but also promotes financial inclusion by expanding access to personalised banking solutions.
Beyond individual benefits, open banking enables businesses to seamlessly share and integrate services, transactions, and data with partners—unlocking new opportunities to create more valuable and innovative financial products and services.
Coupled with artificial intelligence (AI), open banking has the potential to unlock new levels of personalisation, security and customer trust in the financial services industry.
AI-Driven Personalisation in Open Banking
One of the most significant advantages of AI in open banking is its ability to drive hyper-personalisation. AI-powered algorithms can analyse customer behaviour, transaction patterns, and financial goals in real time, delivering tailored financial advice and product recommendations. Unlike traditional banking models that rely on broad customer segmentation, AI enables banks to deliver financial services that are uniquely suited to each individual.
With AI-powered assistants, the future of banking will be more personalised, predictive and proactive. While Standard Personal Finance Managers (PFM) can already give reactive information by using deep categorisation, AI will enable them to do much more. From personalised insights into spending habits, budgeting advice and recommending investment opportunities aligned with their goals, AI-powered assistants can delve much deeper into a customer’s history – allowing PFMs to provide the ultimate customer service.
By leveraging AI, banks can gain a better understanding of their customers, optimise services and enhance engagement – ultimately fostering stronger relationships and increasing customer satisfaction.
Enhancing Fraud Detection and Security with AI
Beyond personalisation, AI plays a critical role in fraud detection and security. As open banking expands, so do concerns around data privacy and financial security. With the increased exchange of financial information between banks and third-party providers, having robust fraud prevention measures in place is essential.
While machine learning (ML) and AI have been adopted in banking for some time, the emergence of AI-assistants allow for continuous improvements when it comes to fraud detection.
For example, AI assistants support in the reduction of false positives, by combining more data into the real-time decision making around fraud. For example, previously, a bank might have flagged fraud if you made a transaction in Amsterdam, when you were in London airport four hours prior. But AI-assistants can use real-time insights to detect that you have travelled to another country, and this is a normal purchase.
AI allows for the continuous improvements of fraud models by using its own decision parameters and why it made that decision through Explainable AI. AI-assistants can act in an almost human-like way to make decisions based on data it is given.
It’s worth noting that fraudsters are using AI techniques themselves and last year it was reported that just over half (53%) of businesses in the U.S. and U.K. have been targets of “deepfake” technology. Additionally, Deloitte stated that Generative AI could enable fraud losses to reach $40 billion in the U.S. by 2027.
Clearly, education is required around deepfake technology, how to spot it and how businesses can be identifying the risks for employees. Education should be a priority globally, for both financial services and their customers, around the risks of AI moving forward.
Building Customer Trust Through AI Transparency
Customer trust is essential to the success of open banking, and AI is playing an increasingly important role in maintaining transparency and confidence in financial services. As AI becomes more integrated into banking operations, the need for explainable AI models grows— ensuring customers understand how their data is being used and why certain financial decisions are made.
Transparent AI-driven decision-making reassures consumers that their financial information is handled responsibly, strengthening trust in banks and financial institutions.
Striking the right balance between personalisation and data privacy is crucial, and banks that prioritise ethical AI practices will be best positioned to maintain customer confidence.
The Future of AI in Open Banking
Looking ahead, AI is set to play an even greater role in shaping the future of financial services, driving innovations that will enhance the capabilities of open banking.
For example, AI-powered autonomous finance will enable customers to automate their financial decision-making, allowing intelligent systems to manage investments, adjust savings plans, and optimise financial strategies in real time.
Real-time risk assessment models will replace traditional credit scoring, enabling instant evaluations of creditworthiness based on a broader range of financial data points. This shift will expand access to lending opportunities, helping individuals who may not fit conventional credit profiles.
In addition, AI-driven regulatory compliance tools will streamline compliance with financial regulations, automating processes and ensuring adherence to data protection laws with minimal manual oversight.
The convergence of AI and open banking is transforming financial services—making banking more intelligent, secure, and tailored to individual needs. As AI adoption accelerates, financial institutions must embrace these innovations to stay competitive and meet the evolving expectations of modern consumers.
AI is more than a tool for optimising operations; it is a transformative force redefining how banks engage with customers, manage risks, and drive innovation.
