Artificial intelligence (AI) is becoming a key part of the technology mix in banks, according to a study by the Economist Intelligence Unit (EIU) for banking platform provider Temenos.

The report, The reality of digital banking, was based on a survey of 400 global banking executives and found that just over 20% of them think AI will improve the user experience.

Survey respondents said AI is becoming a key part of the technology mix and is emerging at all levels of banking, from the customer front-end to the behind-the-scene processes and compliance procedures.

IT executives are the most likely to believe that the most valuable use of AI will be for on-boarding customers (cited by 28%, twice the overall average). Their colleagues in risk and customer services are less enthusiastic, with only 12% happy to employ AI to facilitate product sales, and even fewer see opportunities for AI to assist in micro-targeting, the EIU reported.

The report found that 22% of respondents think AI’s greatest potential is to provide better personalisation, which can improve the customer experience. One-fifth of them expect AI’s biggest value to be improving customer value, and 19% think AI’s greatest opportunity in banking is to fight fraud.

The EIU found that private banks are particularly keen to develop AI-based robo advice capabilities. This is not surprising, considering that relationship managers make up a significant portion of their cost base.

These high staff costs often keep minimum investment criteria beyond the reach of the fast-growing affluent mass markets in Latin America, Africa, the Middle East and Asia, said the EIU.

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Chatbots, software that uses normal language to communicate with people through text or voice, are proving their value in a surprising variety of ways – from accountancy support to mental health.

When AI is done well, customers should not notice that they are talking to a machine – or that a machine is watching and learning from their actions. But whether customers should be informed of who, or rather what, they are interacting with is still debatable, the EIU noted.

Nearly three-quarters of the businesses that took part in the survey think retail banking could be mostly automated by 2020.

The EIU found that the increasing volume of online and mobile transactions, new account sign-ups and the growing realisation that this data can be used profitably means banks must continually increase investment in newer technologies.