Generative AI (genAI) is making it easier than ever to create individualized banking experiences at scale. As banks and credit unions plan their personalization strategies, they need to understand the customer-facing areas where genAI can deliver the most value.

Why does genAI for personalization matter right now?

Improved personalization can drive customer engagement, satisfaction, and loyalty. That makes it a top priority for retail banks and credit unions. Almost three-quarters (74%) of US consumers across generations want more personalized banking experiences, per February 2024 data collected by The Harris Poll for Q2. And increased personalization is a top impact that US and UK banking and insurance executives expect will come from deploying generative AI (genAI) in their organizations, per an August 2023 FintechOS survey.

GenAI opens the door for banks to deliver more personalized banking experiences. Cost-effective and scalable models like ChatGPT, Microsoft Copilot, Google Gemini, and Mistral are enabling even smaller banks and credit unions to personalize banking experiences across the customer life cycle.

But implementation is moving slowly. To date, 90% of banks’ customer-facing genAI solutions are in the exploratory or development phase, per April 2024 Boston Consulting Group research.

Low deployment reflects the highly regulated and risk-averse nature of the banking industry rather than genAI’s potential. Infusing customer-facing processes with genAI carries considerable reputational and regulatory risk. To move pilots forward safely, banks and credit unions must invest in explainable AI (XAI), internal governance, and transparency toward consumers and regulators.