AI and digitalisation revolutionise the banking sector, offering personalised services and improved client engagement.
Technology has rapidly transformed a variety of industries, and banking is no exception. The rise of digitalisation, powered by advancements like artificial intelligence (AI), has revolutionised how we interact with financial institutions. In recent years, customers have increasingly relied on digital platforms, reducing the need for physical visits to banks or ATMs. The 2021 Digital Life Index by Publicis Sapient revealed that 77% of people globally now engage with their banks online, with younger generations favouring mobile apps over websites.
This digital shift creates new opportunities for financial institutions to offer more personalised products, leveraging AI to enhance the customer experience. A McKinsey report from November last year predicted that AI could generate up to $1 trillion annually for the global banking sector, with AI applications including tailored products, personalised experiences, automated transactions, and robo-advisors.
In Singapore, the growth of robo-advisors is notable, with assets under management expected to reach nearly $2.8 billion by 2027. Steven Ong, head of DBS Treasures Singapore, highlighted the increasing use of mobile banking for wealth management and investments. Clients can easily engage with robo-advisors, which build personalised portfolios based on factors like risk tolerance and investment goals.
Beyond robo-advisors, banks are leveraging AI to gain deeper insights into customer data. Singapore’s SGFinDex, launched in 2020 by the Monetary Authority of Singapore (MAS), allows financial institutions to access a comprehensive view of customers’ financial data, enabling them to identify gaps and offer tailored advice. DBS, for example, uses over 100 AI models to provide clients with personalised “nudges” based on real-time data, improving convenience and decision-making.
Looking to the future, there is growing interest in asset tokenisation, where ownership of assets like property or art is fractionalised through digital tokens. MAS is exploring this innovation with Project Guardian, a pilot project focused on decentralised finance (DeFi) applications. While blockchain technologies face challenges, they hold potential for reshaping the banking sector, particularly in areas like security and transaction efficiency.
Despite the advancements in digital banking, human interaction remains crucial. Publicis Sapient’s report found that while 68% of people have interacted with financial advisors online, only 45% were satisfied with the service, with many still preferring in-person consultations. Wealth advisors continue to play a vital role, offering guidance on complex investments and fostering long-term relationships with clients.
At DBS, AI helps wealth advisors engage more effectively with clients by providing insights based on digital interactions. Advisors can leverage this data to initiate meaningful conversations and ensure clients stay focused on their long-term goals, especially during periods of market volatility. Ultimately, technology complements traditional advisory services, creating a more comprehensive and personalised wealth management experience.
