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Tomorrow’s autonomous bank account: AI & the evolution of banking

The bank account of the future is upon us. In fact, many could argue, it is already here. We have already started to see the introduction of artificial intelligence into our banking systems. Micro-investment platform Raiz, where users can invest their spare change, is a great example of using data analysis to provide useful insights to customers about their finances.

The Commonwealth Bank of Australia has just launched a new, buy, now pay later service, that is likely to mean that accessing your pay early will become a normal and everyday function of a bank account. The software and background will know how much you’re getting paid, and will automatically be able to extend you a line of credit.

So, is this a sign of the bank account of the future?

Outside of the credit space, there are many artificial intelligence banking applications on the horizon that will give much deeper and sophisticated insights into our financial lives, including what changes you might need to make in order to achieve certain financial goals.

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Banks and AI companies all over the world are looking at ways to imbed an enhanced digital service offering as a standard feature of a personal bank account.

The way we interact with our bank accounts will be like a digital personal assistant, which will have the capability to scan the internet for flights and accommodation, and seamlessly tell a consumer how many Ubers or coffees they need to give up in order to make that next overseas trip. It might even be able to tell what your planned holiday is likely to cost or to assess availability and suggest that travelling in one month could be twenty per cent cheaper compared to another, more popular month.

Investment and superannuation advice will be another capability embedded into consumer bank accounts, in what could be a major benefit for the entire economy. Australians will become better and more adept at protecting their financial future, which is a very important piece of the puzzle, especially given that jobs within the ‘gig economy’, that don’t necessarily pay superannuation, remain on the rise.

The technology to assist financial wellbeing is already available, albeit in its infancy, and a roll out isn’t as far off as some might think. In the next 12-to-18 months, Australians are likely to see their bank accounts becoming smarter and more useful. Like a financially savvy best friend.

One Swedish company already plugs into a consumer’s bank account and reviews everything from Netflix to insurance premiums, constantly scanning for better deals. You can even give it instructions to cancel or change subscriptions for you– and it won’t be long until it is just added as a basic feature of personal banking.

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Meanwhile, ASX-listed neobank Douugh is looking to overhaul the banking system for millennials with its financial wellbeing app, which is scheduled to launch in Australia this year. The app automatically portions income into different spending, saving and bills jars to help customers manage their money more easily.

Much of this development is being built on the back of Open Banking, which was introduced in Australia in July last year, which allowed accredited third parties to access the savings and credit card data of bank customers.

But one question remains: are consumers going to want to put all this trust in their banking institutions?

On the one hand, the bank account of tomorrow will provide consumers with many benefits, but on the other, these capabilities are asking people to put all their eggs in one basket.

Still, financial stress remains among the biggest pressures in society today, so anything that can help reduce it is likely to be seen as a major positive.

Already, the Gen Z generation has proven to be better at budgeting than any other generation, due in part to the highly sophisticated tools available to them to help manage their finances.

It seems the demand is there from customers wanting help with managing finances, and the technology is available; it is up to the banking industry to respond and bring our bank accounts truly into the digital age.

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Dirk Steller

Dirk Steller

Dirk Steller is the Managing Partner of the fintech focused Seed Space Venture Capital.

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