The financial services landscape is undergoing a dramatic transformation, with traditional banks facing unprecedented pressure to innovate. Since ChatGPT’s launch in November 2022, Generative AI has become a central topic of conversation among customers, within companies, and at the regulatory level. While AI has been part of our lives longer than many realise, this moment represents a critical juncture where traditional financial institutions must adapt or risk falling behind. The integration of AI isn’t just an option—it’s becoming essential for survival in an increasingly digital financial world.
The rise of FinTech companies has intensified competition in the financial services sector, challenging traditional banks and financial institutions to innovate rapidly. According to the “AI Impact – Financial Services” report by House 337 and Savanta, technology has become integral to financial services, with more than two-thirds (68%) of consumers ranking the ability to use technology, including online banking, apps, and AI services, as one of their top priorities for financial management.
The pressure for digital transformation is particularly evident in changing consumer behaviors. The data from the “AI Impact- Financial Services” report, also shows that younger generations are leading this shift, with 40% of under 35s willing to open new savings accounts digitally, compared to only 30% of those over 55. This demographic divide highlights the urgent need for banks to bridge the gap between traditional and digital services while ensuring inclusivity across all age groups.
AI is revolutionising how banks interact with their customers through enhanced digital channels. The technology is enabling more interactive and intuitive user interfaces, with AI-driven features like personalised financial insights and automated customer support becoming increasingly common. Voice assistants, in particular, have gained significant traction, with over half (55%) of consumers currently using them for financial services tasks. At the same time, many banks continue to grapple with legacy systems and technical debt, making it difficult to keep up with customer demands. AI presents an opportunity to bridge this gap, allowing banks to modernise more rapidly and improve digital services without overhauling their entire infrastructure.
The “AI Impact – Financial Services” report found that consumers are most comfortable using virtual assistants for informational tasks, with 60% likely to use them to find the nearest ATM and 58% to locate bank branches and check opening times. However, that same report shows there’s also growing acceptance for more complex transactions, with 60% of consumers willing to use virtual assistants to check their bank balance and 56% to pay bills.
Behind the scenes, AI is transforming internal operations through Robotic Process Automation (RPA) and intelligent automation. These technologies are streamlining routine tasks such as account opening, customer verification, transaction processing, and compliance checks. When combined with conversational AI, this automation improves efficiency and allows customers flexibility to initiate and complete processes on their own schedule.
Financial institutions are also leveraging AI for regulatory compliance and communication creation. AI systems can monitor and analyse operations continuously, identifying potential issues before they cause disruptions. For instance, AI tools can ensure consistent and accurate tone of voice in communications while managing the review and approval process, particularly crucial for maintaining regulatory compliance.
While specific case studies from the documents are limited, the research shows that financial institutions implementing AI-driven solutions are seeing significant benefits. For example, according to the “AI Impact – Financial Services” report by House 337 and Savanta, chatbot adoption is gaining ground, with 44% of those aware of these services actively using them. This study also found that adoption is particularly strong in the US, where 43% of voice assistant users engage with financial services through these platforms, demonstrating the potential for successful digital transformation when properly implemented.
The future of AI in financial services will be shaped by evolving regulations and advancing technology. AI agents are anticipated to become more autonomous, potentially handling complex tasks such as executing trades and managing investments. Success will depend on balancing innovation with security, compliance, and customer trust.
The digital transformation of banking, powered by AI, is not just about adopting new technologies—it’s about reimagining financial services for the digital age. As adoption of these technologies becomes even more widespread, the real differentiator for financial institutions won’t be technology alone—it will be brand. With access to similar AI-driven capabilities, banks must focus on creating distinct, trust-driven experiences that set them apart. Now is the time to rethink customer engagement and redefine what your brand stands for in the AI era.
James Poulter, Head of AI and Innovation at House 337