By JJ, Global Head of Artificial Intelligence and Data Science, Globant UK
Open banking has evolved beyond its origins as a regulatory initiative. Today, it is the launchpad for a smarter, more transparent and highly personalised financial ecosystem. At the core of this transformation is AI, which is redefining how banks, FinTechs and consumers interact. As the UK and global markets become more data-driven, integrating AI into open banking is now essential.
We are now entering the era of open intelligence. This is a stage where AI not only integrates with financial systems but also influences decision-making, risk management and customer engagement. It delivers personalised experiences, improves fraud detection and supports smarter compliance. In doing so, AI is helping to shape the future of financial innovation.
From open banking to open intelligence
Open banking began as a way to increase transparency and give consumers greater control over their data. However, its true potential is realised when combined with intelligent technologies. AI and generative AI can process large volumes of transaction data, behavioural patterns and even unstructured information to deliver smarter, context-aware services.
This shift from static APIs and manual integrations to responsive, AI-powered platforms signals a clear shift. The focus is no longer just on accessing data but on using it in real time to understand customers and respond to their needs. As a result, banks can predict behaviour more effectively, FinTechs can offer more relevant services, and the financial system becomes more agile.
The pace of adoption is already picking up. In the UK, open banking payments reached 14.5 million in January 2024, marking a 69% increase over the previous year. This reflects growing consumer trust in open frameworks, especially when they are combined with intelligent, real-time capabilities.
Personalisation at scale
One of the most valuable applications of AI in open banking is personalisation. Instead of relying on broad demographic categories, banks can use AI to offer services tailored to individual goals, spending habits and financial behaviours.
Imagine a digital assistant that not only categorises your transactions but also alerts you to rising expenses, suggests a better savings plan or reminds you of upcoming subscription renewals. AI systems can detect context, such as salary changes or planned travel, and adjust their recommendations accordingly. This allows banks to act as proactive financial partners, not just service providers.
More personalised engagement also unlocks greater value. Recent figures show the average open banking payment now stands at £450, compared to £50 for a typical card transaction. This suggests consumers are already using AI-augmented systems for more substantial and considered financial actions.
Enhancing security and compliance
As financial data becomes more open and accessible, the risk of fraud, data misuse and cybersecurity threats increase. AI is a key tool for addressing these risks.
Modern AI systems can scan millions of transactions in seconds, detecting anomalies that may signal fraud. Unlike static, rule-based systems, AI models can learn and adapt using real-time signals such as location, device information or transaction history. This helps reduce false positives and improves customer experience.
Fraud is also becoming more advanced. Nearly half of financial institutions have been targeted by deepfake scams. In response, banks are adopting AI tools that use biometric checks, contextual insights and explainable models to strengthen defences.
AI also supports compliance by increasing transparency in decision-making. Explainable AI allows banks to justify automated outcomes, such as loan approvals or risk flags. This is vital for meeting UK and EU regulatory requirements around fairness and accountability in algorithmic systems.
Trust is the foundation
AI can unlock innovation in banking, but only if customers trust how their data is being used. People want to know that their information is safe, used ethically and handled with care. Transparency, consent and control are critical.
AI systems that show how decisions are made, let users manage their data and avoid opaque practices will be more likely to gain long-term trust. Banks that align their AI strategies with ethical values and clear communication will have a distinct advantage in the years ahead.
What the UK should do next
The UK is in a strong position to lead this new phase of digital finance. It already has one of the most advanced open banking frameworks and a growing ecosystem of fintech innovators. In parallel, 75% of UK financial firms are already using AI, with another 10% planning to do so by 2027.
However, realising the full potential of AI will require closer collaboration across the sector. Banks must invest not only in AI tools but also in governance, data ethics and staff education. FinTechs should aim to integrate responsibly within the wider ecosystem, ensuring interoperability and shared standards. Regulators will need to develop adaptive frameworks that encourage innovation without exposing consumers to undue risk.
AI is no longer just changing what banks are capable of. It is reshaping what customers expect from their financial providers. And in the future, those who succeed will be the ones who combine innovation with trust.
