Cognitive banking seeks to bridge advice gap as banks lean on AI

Cognitive banking is being pitched as a way to personalize financial wellness as branches shrink and customers rely more on apps. As few as 9 per cent of people received financial advice in the past year, according to the FCA. Udi Ziv, chief executive of Personetics, said the banking industry started with people and a banker who guided customers toward financial wellness, but today the process is often impersonal and detached.

Cognitive banking harnesses customer data, which banks collect in large volumes, to build a picture of a customer's financial needs and habits. It can identify potential needs such as duplicate subscriptions, predict that an overdraft could occur within a set window, and offer timely insights and recommendations. Instead of a plain list of transactions, banking apps could highlight opportunities or risks and tailor product suggestions to the right customers. Ziv noted that this approach could help customers act before it is too late and could improve retention for banks that implement it. He added that cognitive banking can bridge the gap in financial wellness, an area that many institutions have neglected.

Personetics is already deployed with banks in about 30 countries and serves roughly 150 million people worldwide. In the United Kingdom, Santander and Metro Bank are among the lenders using its technology. Ziv argued that the trend could reshape competition in a market where customers now access multiple providers and often switch for better value or experience. He predicted that by 2025, a typical person could have between three and five banking-type apps on their phone. A majority of consumers, about 59 per cent, said they had purchased a financial product from an institution other than their main bank in the past year, with Gen Z figures higher at about 82 per cent. About 84 per cent said they would switch banks for a "quality banking experience," a dynamic that could pressure incumbents to adapt.

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, said Ziv. Banks that choose not to leverage AI risk falling further behind their peers.

The debate over how receptive Britons will be to this new wave of banking—and how their daily spending is monitored—continues. Still, the trajectory is clear: cognitive banking and AI-driven insights are moving from a niche capability to a central feature of modern retail banking, with potential implications for pricing, advice, and financial wellness.

In the UK, mainstream banks face a choice between competing more aggressively on personalized service or relying on traditional models, a dynamic that will shape product sourcing, pricing, and customer retention in coming years.