Cognitive Banking Aims to Close the Financial-Advisory Gap as Banks Go AI-Driven

Cognitive banking could bridge the financial-advisory gap by using customer data to tailor insights and recommendations for individual users, as banks shift toward digital-first services. The trend arrives as branches close and app-based banking becomes the default for many customers, prompting a debate about how best to support financial wellness outside a traditional adviser relationship.

Bank branches are disappearing at a rapid clip. In the United Kingdom alone, about 163 branches have closed this year already, and thousands more have shut over the past decade as customers migrate to online platforms and challenger banks. The shift helps explain why technologists and bankers alike push cognitive banking as a way to maintain a personal touch in a highly digital environment.

Udi Ziv, chief executive of cognitive-banking firm Personetics, told This is Money that the industry’s early model centered on a person serving as a financial wellness adviser. “The way the banking industry started was all about people. There was always a banker in the mix and they had a degree of responsibility for their customers' financial wellness,” he said. He noted that today, for many, “nothing is personal” in the sense of tailored guidance, and many customers either do not seek advice, think it is unaffordable, or do not even realize it is an option. As figures from the FCA show, as few as 9% of people received financial advice in the past year.

Cognitive banking harnesses the vast trove of customer data banks accumulate to build a picture of a user’s financial needs and habits. Rather than simply listing transactions, banking apps could flag upcoming needs or risks—such as unneeded duplicate subscriptions or the likelihood of hitting an overdraft within a defined window—and offer timely insights. Ziv says such capabilities let banks act before a problem or missed opportunity. This approach may also enable more precise product advertising, targeting offers to customers who actually need them rather than broadcasting messaging to a broad audience.

The promise, according to Ziv, is twofold: better experiences for customers who see their needs recognized and acted upon, and higher engagement and retention for banks. By contrast with other consumer tech, which Ziv says has become highly personalized through digital interactions, traditional banks have often lagged in making every interaction feel individual. “There’s nothing that is not per my needs,” he said of the consumer-facing platforms set by firms like Amazon, Netflix and Spotify. “Cognitive banking was born to bridge that gap.”

Personetics is already working with banks in about 30 countries, serving roughly 150 million people. In the United Kingdom, Santander and Metro Bank have adopted its technology. The company’s growth comes as more banks face a landscape where customers increasingly shop across multiple providers for different financial products, rather than sticking with a single primary bank.

A shift in consumer behavior underscores the opportunity for cognitive banking. In today’s environment, many people wield three to five banking-type apps on their phones, depending on geography. Data from consumer surveys show a marked openness to switching banks for a better experience: a majority of respondents—roughly 59%—reported purchasing a financial product from an institution other than their main bank in the past year. Among Gen Z, that figure climbs to about 82%. And roughly 84% said they would switch banks for a higher-quality banking experience. Those dynamics create pressure for traditional banks to offer more value within their own ecosystem rather than rely on a one-bank-per-life model.

The rising tide of generative artificial intelligence also figures into the competitive calculus. Ziv argues that banks that fail to leverage AI to better understand and anticipate customer needs risk falling further behind peers who do. He predicted a future in which AI-enabled personalization becomes the norm across retail banking, complementing the first wave of cognitive-banking implementations. “We believe this is going to be the future of banking… in a few years' time we are going to see a flood of AI use in retail banking, complementing the first generation of cognitive banking that banks are starting to adopt,” he said.

The question of receptivity among Britons and other customers remains open. Privacy concerns, questions about data security, and the balance between helpful guidance and intrusive monitoring are part of the ongoing debate about cognitive banking. As customers increasingly interact with multiple institutions, banks face a twofold challenge: deliver distinctive, helpful services while guarding trust and safeguarding personal information. Industry observers note that public attitudes toward data usage will shape how quickly cognitive banking can scale from pilots to widespread adoption.

In the near term, cognitive banking is likely to take the form of proactive alerts, personalized budgeting tips, and contextual product suggestions designed to align with a user’s stated goals and real-time spending patterns. For banks, the technology offers a route to differentiate in a crowded, app-first market and to reduce churn by delivering value that aligns with individual financial wellness. Midfield players in the space point out that success will depend on transparent data practices, clear value exchange, and robust governance around the use of predictive insights.

As institutions weigh the costs and benefits, the market momentum toward AI-enabled personalization appears unlikely to slow. The combination of branch closures, rising consumer expectations for seamless digital experiences, and a growing catalog of AI tools suggests cognitive banking could become a standard element of retail banking strategy in the coming years. Whether customers embrace the deeper, data-driven guidance will influence the speed and scale at which these technologies are deployed across lenders of all sizes. For now, the conversation continues about how best to balance convenience, personalization and privacy in a digitally powered financial landscape.

Banks are watching closely what the major tech-enabled retailers have already shown: pervasive personalization driven by data and AI can redefine customer expectations and monetization. The next few years will reveal how much of that retail-model paradigm can be responsibly translated into everyday banking, where the ultimate test remains whether customers feel more financially supported, with products that truly fit their needs, and without compromising trust.