Banks of the future will use AI to influence financial decisions, say experts

2 January 2024, 10:04

City of London skyline
AI will be used in every section of bank, say experts. Picture: PA

Tom Merry, head of banking strategy at Accenture, said the tech could ‘touch almost everything that goes on at a bank’.

Next-generation banks will use generative artificial intelligence (AI) to influence people’s financial decisions, spot potentially vulnerable customers, train call centre staff and even run social media accounts.

The complex technology could “touch almost everything that goes on at a bank”, according to Tom Merry, the head of banking strategy at Accenture.

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.

Businesses embracing generative AI
UK banks could use AI to recognise a distressed or vulnerable customer (Alamy/PA)

It has been cutting through into the mainstream with chatbots like ChatGPT and Google’s Bard.

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 he said he has had more requests from banking firms who are keen to experiment with the tech.

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.

Elsewhere, Mr Merry 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,” he told the PA news agency.

“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.

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.

“Based on this, we can start to form views on the likelihood that they could struggle to meet their payments,” she said.

“AI has the power to transform customer support from a reactive relationship to a proactive one.”

It comes as Britain’s largest high street lenders have axed hundreds of branches across the country as they shift toward mobile banking.

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.

By Press Association

More Technology News

See more More Technology News

A laptop displaying a ‘Matrix’-style screensaver

MPs: Ministers must give protections to creative sector amid AI copyright fears

French President Emmanuel Macron addresses the audience in a closing speech at the Grand Palais during the Artificial Intelligence Action Summit in Paris

Refusal to sign AI declaration was ‘based on what’s best for British people’

Someone at a computer keyboard

Airbnb issues warning over holiday scams fuelled by AI and social media

An HSBC branch

HSBC online and mobile banking working again after service outage

HSBC on growth across the UK

HSBC hit by outage as users complain of being unable to log on

The summit in Paris (Michel Euler/AP)

UK did not sign AI communique over ‘opportunity and security’ concerns – No 10

Sky Glass Gen 2

Sky unveils second generation Sky Glass TV promising ‘better picture and sound’

Technology Stock

UK announces sanctions against Russian cyber crime network

Participants in the AI Action Summit pose for a group photo at the Grand Palais in Paris

UK appears not to have signed leaders’ declaration at AI summit

OpenAI CEO Sam Altman

Sam Altman reiterates OpenAI ‘not for sale’ after Elon Musk-led bid

A young girl uses the TikTok app on a smartphone.

Data of dead British children may have been deleted, TikTok boss says

Elon Musk

Elon Musk offers $97bn to buy ChatGPT-maker OpenAI

Alesha Dixon (Jordan Pettitt/PA)

Alesha Dixon working ‘super hard’ to stop children having phones

A quarter of those who have fallen victim say they blamed themselves (PA)

Almost half of children aged between eight and 17 ‘have been scammed online’

Samaritans said the Act does not go far enough (PA)

Online Safety Act ‘missing vital opportunity’ on suicide content

Former prime minister Rishi Sunak with Sam Altman

OpenAI boss Sam Altman says DeepSeek did ‘nice work’ with AI chatbot