Consumers Want Advice–But Don't Trust AI. Can Banks Bridge The Gap?
As Americans face persistent inflation, fluctuating interest rates, and on-again, off-again tariffs, they're growing weary of their financial future.
To navigate this financial pressure, Americans are looking to their bank for support. With banks holding the majority (80%) of consumer trust, according to research from SBS and Sopra Steria, consumers expect more than a place to store their money, they want help protecting and growing it too. And as consumers receive curated experiences across everything they do from streaming to shopping, they now expect the same level of personalization from their bank.
But there's a disconnect between what consumers expect–and what many banks are delivering.
While most consumers want personalized financial guidance from banks, 40% say they haven't received any. And beyond that, more than half (51%) believe their bank isn't interested in helping them earn more money.
This doesn't only keep banks from properly supporting customers through economic uncertainty —it's a risk to long-term customer loyalty. According to Eric Bierry, CEO at global financial technology company SBS, 'When consumers feel their bank can meet their needs in economic uncertainty, the consumer is more likely to use more of the bank's products – strengthening the relationship. For banks that can't meet this need, they risk losing customers to competitors.'
To deliver the tailored experiences customers expect, banks are increasingly investing in AI capabilities. Recent data from GFT Canada highlights that over 45% of banks are investing in personalized banking and marketing to elevate the customer experience.
With AI, banks can offer financial guidance tailored to individual customer's financial situations and goals, and adjust in real-time to reflect changing economic conditions, all directly in the tools customers already use, like online portals and mobile apps.
Banks have an opportunity to transform how customers manage and grow their money through AI, but before they can unlock the full potential of AI, they have to address a critical gap: while consumers have trust in their banks, many don't yet fully trust AI.
AI can provide the banking experience customers want–but it needs data to do it.
Today, getting financial advice from a bank often involves sitting down with a financial advisor. This approach requires consumers to visit a branch in-person, when many are regularly interacting with their bank via app or website, and doesn't provide the real-time financial advice consumers need in a constantly shifting economy.
In fact, according to a recent Prosper Insights & Analytics survey, 91% of Gen-Z, 87% of Millennials, 92% of Gen-X, and 87% of Boomers do not feel very financially secure, underscoring how widespread a sense of financial instability is across the U.S.
Prosper - Overall Financial Security Prosper Insights & Analytics
AI offers a more accessible approach to guidance to address consumers' feelings of financial instability. It enables banks to meet customers with personalized advice on the digital channels where they already spend their time, like on the banking apps and websites. By using AI to analyze consumers' financial data and market trends within the wider context of their financial goals, banks can more effectively offer relevant advice and strengthen customer loyalty. One of AI's most significant strengths is detecting patterns and anomalies, making it perfectly primed to provide the financial advice customers need as they navigate economic uncertainty.
But before AI can meet customers with the guidance they need on the digital channels they're on, banks need to first build a data foundation to allow AI to work effectively. This means bringing together customer data that is not inherently linked–across channels, business units and products— into a central location where they can be easily accessed by AI systems. With this holistic view of customers, banks can properly assess their financial posture, understand their financial goals, and provide relevant advice to every individual customer.
'AI is only as powerful as the data it can access. This means that if there is a consumer-facing chatbot, for instance, the chatbot should be able to view every product the consumer has with the bank, every transaction the consumer made, private banking notes, broader market trends, and more,' said Bierry.
SBS partners with leading banks and financial institutions like Santander, Société Générale and KCB Bank, to reimagine how to operate in an increasingly digital world. As part of this transformation, SBS centralizes banks' data through its cloud-based SBP Digital Banking Suite to create a unified data foundation for AI. The system then embeds advanced AI capabilities that empower banks to leverage generative AI to deliver personalized financial insights for customers at scale, ultimately strengthening customer engagement and operational efficiency.
Consumers are concerned about their privacy and money.
Before banks roll out AI capabilities across their organization, they must address one of their customers' biggest concerns: security. Personalization can't come at the expense of privacy.
Despite AI's mainstream growth, with many people using ChatGPT and other AI tools for everything from budgeting to trip planning, consumers are still hesitant about AI when their personal data is involved.
According to a recent Prosper Insights & Analytics survey, over 58% of consumers are Extremely/Very concerned about their privacy being violated from AI using their data.
Prosper - Concern About Privacy From AI Prosper Insights & Analytics
'When it comes to banking products, consumers' top priority is ensuring their hard-earned money is secure – this extends to products that leverage AI,' said Bierry.
Banks must prioritize secure, transparent AI solutions to address consumers' privacy concerns—protecting both their money and their trust.
Bridge the AI gap with transparency and security.
Leveraging personal financial data with AI and ensuring the data remains secure are not mutually exclusive, they're two sides of the same coin. From the start of any AI initiatives at a bank, security and personalization must run parallel with each other
According to Bierry, the process of connecting all of these data points and then deploying AI solutions on top of them requires security measures to be at the forefront. 'For any internal tools, ensure they are designed with data privacy and security in mind from the outset. If the institution is using external tools, the provider should hold themself to very high security standards.'
In many cases, privacy isn't only a matter of ensuring trust with customers. It's also a critical aspect of compliance that could lead to high fines and significant reputational damage depending on the jurisdiction. Bierry says, 'Whenever AI is used in a consumer-facing offering to provide financial advice, the bank should clearly disclose its use.'
AI presents an opportunity for banks to provide customers with the critical financial advice they need as they navigate uncertain times, those banks that offer these experiences and can overcome customer security concerns will ultimately be the ones that pull ahead.
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