The future of banking will be shaped by customisation and transparency as banks increasingly use AI and data analytics to personalise services.
Customisation: Banking designed for your needs
Personalisation has been around in banking for a while, but its importance is set to increase significantly in the coming years. Thanks to technological advancements and data analytics, banks can provide personalised experiences to their customers. The upcoming trend in banking involves catering to individual preferences, from tailored financial guidance to personalised product suggestions.
Accenture's study revealed that 73% of customers are willing to share their data with banks in exchange for customised services. This emphasises the increasing need for customised experiences and the readiness of customers to share their data with banks that can provide benefits in exchange.
Client services with open banking
Providing services to clients, especially the wealthy, requires strong data and digital infrastructure to discover new ways of adding value and communicating effectively with customers. The worldwide growth of open banking is changing the status of data from private possession to a collaborative, accessible asset, propelled by regulatory efforts and heightened consumer knowledge. Strong systems and regulations in the European Union led to the development of open banking, and other countries like Saudi Arabia, Australia, Brazil, and the United States also adopted similar practices and implemented regulations to encourage widespread use.
Examples of this are Mastercard's capabilities in European open banking, ING's partnership with Salt Edge for open banking scenarios, and Experian's collaboration with Zopa Bank to improve credit card evaluations. Likewise, BNY Mellon's Bankify, created in partnership with Trustly, enables companies to accept payments from customers' bank accounts.
Recent advancements in cognitive processes
Personalisation with AI technology
Banks are using artificial intelligence (AI) and machine learning (ML) to provide personalised experiences on a large scale. AI algorithms are able to predict customer requirements, identify trends, and provide pertinent suggestions immediately after examining extensive data. For instance, Bank of America's AI-powered virtual assistant, Erica, offers tailored financial advice to customers, assisting them in making more informed financial choices.
Banks are also adopting open banking ecosystems, partnering with fintech startups, tech giants, and other financial institutions to develop additional services that bring value. In the UK, banks such as HSBC and Barclays have collaborated with fintech companies to provide creative services like account aggregation, budgeting tools, and peer-to-peer payments on their mobile banking applications.
Combining services for wealthy clients while embracing open banking paves the way for a vibrant future in banking. Banks position themselves to successfully navigate the complexities of the constantly evolving financial landscape by taking a proactive stance in understanding and meeting customer needs at different life stages with personalised services and utilising open data. This strategic coordination guarantees both continued growth and durability in the face of ongoing challenges that may arise within the financial system in the future.