The rise of the digital banks and digital technologies has created a pause for thought for many incumbent banks and traditional lenders. While the sector remains extremely competitive, the new generation of banks have naturally built their value proposition using new technologies. Banks have more to learn from challengers and other industry players than from their traditional industry "peers". Industry boundaries are disappearing at an alarming rate thanks to Open Banking and Banking-as-a-Service technologies.

For banks, successfully integrating personalization elements across touchpoints with customers will be critical to deliver a superior experience and thus, better financial outcomes. The “AI-Engagement” layer should provide banks with a deeper and more accurate understanding of each customer’s context, behavior, needs, and preferences. This understanding, in turn, enables the bank to craft an intelligent, contextual and personalized offering. To support this, banks need to analyze customer data in real time and embed financial services within customer journeys.

In the second part of our Quick Guide to Understanding & Competing With Neobanks, we examine how banks can take an AI-first approach to reimagining customer engagement. We focus on three elements with the potential to give the bank a decisive competitive edge.