Artificial intelligence in banking (AI) has rapidly evolved from being an emerging trend to a potential driver of transformation within financial services. Banks and credit unions are testing use cases and now realizing the immense potential AI offers in streamlining operations, enhancing security, and improving account holder experiences. Yet, despite the enthusiasm for AI’s potential, there remains a gap in how financial institutions and account holders perceive its impact on consumer banking solutions.

To separate market myth from reality, Alkami recently surveyed 150 regional and community financial institutions (RCFIs) to assess how they are currently using or planning to use AI across various digital banking use cases, their attitudes towards the opportunities and challenges AI presents, and their outlook on its potential future impact to their business. Over the same time period, 1,500 digital banking consumers were asked the same to compare and contrast their attitudes, perceptions, and beliefs to the RCFIs that serve them.

According to the research study, while 96% of financial institutions see AI playing a critical role in the next five years, only 61% of consumers expect it to significantly influence their banking interactions​. This divide highlights a challenge for financial institutions: how to harness AI in ways that not only improve efficiencies but also build consumer trust.

Using AI For Fraud Protection

Security is a top strategic priority for financial institutions, with 44% ranking fraud protection as one of the top two leading AI use cases​. As our digital-centric world becomes more complex, the need for security measures intensifies. AI is emerging as a powerful tool in fraud detection by using machine learning algorithms to identify unusual transaction patterns and mitigate risks – such as credential stuffing attacks – in real time. 

AI’s role in security extends beyond reactive measures. With the speed at which it can analyze even extremely large data sets, AI can help predict potential threats and proactively safeguard institutions and their account holders. This positions AI as not only a tool for operational efficiencies but as a critical line of defense in the digital banking ecosystem.

The research study above also found that all generations would be comfortable using AI for security and fraud protection, one of the top cited use cases. Security and fraud protection was defined as being alerted that an account holder may be the target of a suspected cyberattack or fraud scheme and, at their request, freezing the account(s) should a suspected fraud scheme or cyberattack be underway. Baby boomers cited the highest comfortability at 50%, followed by Gen Xers at 38%, younger millennials at 35% and Gen Z and older millennials at 34%.