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Challenger Banks and Tailored Banking Experiences

A recent Deloitte report outlined that hyper-personalisation is “an imperative for banks”, allowing them to respond to customer needs, as well as differentiating their brand, boosting revenues and helping to improve financial inclusion. The pandemic has certainly helped this along, as the last 12 months have seen banking change completely as people are requiring personalised digital interactions.

Steve Whiting, Head of Payments Technology at Soldo, said: “Advances in internet, mobile and social media have meant that consumers expect smooth, user-friendly experiences, and business leaders are of course also consumers. They, therefore, want to be able to manage their financial activities with the same ease that they manage their photos on Facebook or Instagram. This, I believe is a good definition of fintech – using the techniques and technology that took the Internet to social and mobile and adding to it the world of finance.”

It is these digital tailored banking experiences that are considered to be the future of the banking industry, especially when it comes to challenger banks, as it allows them to be more competitive against incumbents. Digital platforms, as many challengers have or utilise in at least some way, allow financial institutions to personalise content at scale, automating the process and allowing for deeper connections and consistent messaging. By offering these personalised interactions these companies have positive customer experiences.

Panos Archondakis, Senior Director of Wealth Management at Epam Systems, Inc., is a firm believer in tailored banking solutions leading the way in the finance industry.

He said: “Banking is heading to a ubiquitous future where devices, services, data and technology connect to create new digital experiences centred around the customer. According to a recent EPAM Continuum Consumer Banking report, 40 per cent of 18-to-44-year-olds are open to innovation, revealing an opportunity to integrate banking services with customers’ go-to channels. The report also showed that despite recent innovations in financial services, behavioural drivers of banking customers remain largely unchanged. This highlights the need for banks to take a multi-channel approach that brings banking to their customers’ personal digital ecosystem – not the other way around.”

The role of chatbots

Continuing his thoughts of a digital world, Archondakis believes that Conversational AI is playing a fundamental role in revolutionising how banks interact with their customers, providing personalised experiences.

“Chatbots are already advancing customer experiences and will continue to do so with an interconnected assistive layer,” he said.  “Previously long-winded interactions involving apps and logging into accounts will be reduced to a single voice command and user-journeys will become ubiquitous as they drift across devices and from voice to chat.

“Conversational AI is driving the next wave of customer experience transformation in banking, with voice technology playing a fundamental role. Whether we’re tracking the shipment of our latest online purchase, accessing our bank balance or asking for a weather report, virtual assistants such as Siri, Alexa or Google Home have become firmly integrated into our daily lives – and this is only set to increase. Forecasts now suggest that by 2024, the number of voice assistants will reach 8.4 billion units—a number higher than the world’s population.

“Conversation takes many forms, though. As COVID-19 has accelerated the move to digital-only services, many organisations are launching their own virtual agents – both voice-activated and chat-based – with many of these starting to replace traditional telephony, app, and web experiences, as brands shift from “mobile-first” to “AI-first” strategies. Conversational AI forms the foundation of this change, as advancements in Natural Language Processing (NLP) and Robotic Process Automation (RPA) revolutionise the customer experience. Banks have an incredible opportunity to differentiate and place themselves at the forefront of this change by using conversation to serve and assist customers at every step of the journey.”

Personalised digital conversations

The idea of personalised digital conversations is something Shared with TSB, who have launched their chat service TSB Smart Agent, and integrated it into the banks mobile banking app – averaging over 1000 conversations a day on mobile devices.

In partnership with IBM, the chat service was first introduced to TSB’s internet banking platform in just five days at the start of the Covid-19 outbreak as TSB looked to meet the rapidly changing needs of its customers. Since then, TSB Smart Agent has handled one million conversations with customers and provided important assistance throughout lockdown and the pandemic.

The benefit of using AI and the advanced natural language processing capabilities of IBM Watson Assistant is that TSB Smart Agent will be able to evolve, continuously improving the conversations it has with TSB’s customers. The virtual agent will be constantly developing from its initial design to provide higher quality responses and guidance for an expanding range of queries. It will be able to recognise different customer terminology and the introduction of new products and services, for example, to support customers with queries about their accounts.

TSB Smart Agent has also been trained to understand a customer’s reason for engaging and how a similar question could be asked in several ways, providing the best possible response so customers can expect a tailored service. When TSB Smart Agent is not able to answer a query, it will pass the customer to a TSB adviser to help instead, all within the same mobile chat. A number of information gathering journeys have been built into TSB Smart Agent so information can be collected from the customer before handing the query to a TSB colleague.

Michael Conway, Partner and AI Practice Leader, IBM UK Global Business Services, said: “As the financial services industry continues its rapid transformation, it was a real pleasure to work in partnership with TSB and support its ambition to become a truly digital business. By modernising
applications and tapping into higher-value technology, including AI, TSB has been able to deliver new innovative services to its customers.

“Bringing artificial intelligence into new areas for the bank and building on its hybrid cloud foundations has brought even more efficiency and effectiveness. This shows how technology can be employed at pace to further enhance the stellar work already being carried out by the bank’s employees.”

Aiding financial inclusion

According to the same Deloitte report, tailored banking experiences are also incredibly useful in increasing financial inclusion. It said “At the moment, banks’ minimum thresholds are often high, thus preventing certain customers (i.e., underbanked customers) from accessing them. Examples of products tailored to be widely sold include fractional trading. For example, as certain stocks cost more than $1000 per share, brokers have allowed fractions of shares to be traded, so that smaller investors can invest in them. Other products include micro-insurance, microcredit, and micro-savings.”

An example of this is Aion Bank Belgium, who take a “holistic view” at improving their member’s financial health.

Kim Van Esbroeck, Country Head, Aion Bank Belgium, said: “Not only are we removing fees from daily banking, but we are also developing products and services to help members save and earn. For example, we currently offer one of the highest interest rates for savings accounts in Belgium.”

“Our signature product, MoneyMax, was designed to find the best interest rates on deposits and the best deals for utilities and mobile phone plans. Not only will we find the best deals, but we will match the best interest rates for deposits and seamlessly change utility and mobile phone providers for our members, as many times as they would like. MoneyMax can also track recent online purchases to make sure members paid the best price; if a better price for the same product is found elsewhere, the difference is directly refunded to the member’s Aion account.

“For ETF investments, we offer a technology-enabled solution to portfolio management that gives easy access for anyone to start investing. We developed a unique, fully digital investment questionnaire to determine a member’s risk appetite easily within our app. We then recommend a portfolio that matches the member’s risk profile, and portfolios are automatically managed and rebalanced in order to stay aligned with the member’s risk.

“For our upcoming Poland launch, the product will be completely tailored to the Polish market. We want to show Polish consumers the true value of unlimited banking. Our aim is to establish a deep relationship with each individual customer so that we can get to know their individual needs and tailor our offer to them.”


  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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