Next-generation banks will use generative artificial intelligence (AI) to influence people's financial decisions, identify at-risk leads, train call center staff, and even operate social media accounts.
Complex technology can “touch almost everything that goes on in a bank,” according to Tom Merry, head of banking strategy at Accenture.
The UK banking industry has been using AI for years, for example through predictive models that detect fraud and analyze risk.
But more banks are starting to experiment with the use of generative AI, where complex models can create something entirely new based on a wide range of data.
The trend has been broken into with chatbots like ChatGPT and Google's Bard.
Merry, who works with lenders on their turnaround strategies, said the technology is “exciting but scary” for bank chiefs who are “nervous” about its risks.
But he said he has received more requests from banking companies keen to try out the technology.
This could mean using people's personal spending and bank data to design a personalized product for the customer, or 'nudge' through online banking towards them making small decisions to improve their financial strength.
It could also see banks trialling voice recognition technology – meaning AI can pick up on a caller's emotions and potentially detect if they appear vulnerable or sad, prompting staff to engage more.
Elsewhere, Merry suggested that generative AI could go as far as managing banks' social media platforms, or training human resources and call center staff, for example through “avatars” for role-playing interactions.
Peter Rothwell, head of banking at KPMG in the UK, noted that clients 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 the bank knows about you, the more assistance they can give you in terms of helping you manage your key results,” he told the PA news agency.
“But this requires trust, data security and reliability.”
For example, a bank that receives a credit card request from a customer could push them toward a short-term overdraft instead, using artificial intelligence and based on what they know about their financial situation.
“In order to get to this point… I need to trust that they have my best interests at heart, not their own,” 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 survey by Eligible, an AI platform for banks, found that nearly a quarter of people in the UK said they had not received any communications from their bank tailored to their financial situation, leading them to ignore them completely.
Zahra Hassan, co-founder of Eligible, said AI can be used to detect how well a person understands a financial product and thus detect potentially vulnerable customers.
“Based on that, we can begin to form views on the possibility that they may have difficulty making 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 biggest lenders ax hundreds of branches across the country as they shift towards mobile banking.
Research by KPMG UK found that around a fifth of UK consumers did not visit a bank branch in the last year, up from 14% in 2022.
Only 13% of respondents had visited a branch in the previous week when the survey was conducted last month, compared to 18% the previous year.
Just over a third of adults now consider an easy-to-use app to be the most important interaction they have with their bank, up from a quarter who said this last year.