Regional banks using AI to attract customer deposits

Several regional banks in the United States, including Fifth Third Bancorp, Huntington Bancshares, and Valley National Bancorp, are using artificial intelligence (AI) to attract more customer deposits. As more consumers search for better online banking options and higher interest rates, these banks are adapting their strategies to keep customers from switching. Valley National has been using AI for about nine months to identify which customers might be interested in new products. This technology allows them to personalize online messages and target specific accounts. They have seen positive trends in attracting new customers. Fifth Third also leverages over 100 AI models to enhance product recommendations, resulting in a 40% increase in customer engagement. Banks are becoming more focused on understanding consumer behavior with the help of AI. A report by McKinsey advised banks to use machine learning to spot which customers might leave for better rates. This competitive landscape is vital as banks try to strengthen their relationships with customers. Some AI companies, like Personetics Technologies, assist banks in winning deposits by predicting customer behavior. For instance, one major bank gained 20,000 new savings accounts through this technology. Another example is the Royal Bank of Canada, which used AI to help customers save automatically. Curinos, another AI firm, helps banks tailor their deposit offerings based on customer data. One of their clients reportedly gained over $1 billion in additional deposits thanks to these insights. However, experts caution that AI could lead to discriminatory outcomes, potentially targeting vulnerable customer groups with high-fee accounts. Banks like Huntington are aware of these risks. They emphasize fairness and regulatory compliance in developing their AI strategies. The focus is not just on increasing deposits, but also on ensuring these efforts do not inadvertently harm customers.