Rising demand for digital has made competition between incumbent and challenger banks more intense than ever. But who is winning the battle for consumers, and in what areas? Temenos and the Economist Intelligence Unit have sought the answers in a groundbreaking new report "Customer experience: learning from online personal finance conversations". This used machine learning to analyze over 10 million online conversations about personal finance. The report concludes that customer experience and engagement including personalization is top priority for challengers and incumbents alike.

Artificial intelligence (AI) and machine learning will shape the global banking industry over the next five years, according to a survey of industry executives. The research, conducted by the Economist Intelligence Unit in partnership with software company Temenos, found that more than three quarters (77%) of the 305 banking executives questioned thought AI would be a key differentiator between successful and unsuccessful banks in the next few years. In particular, AI was set to improve the customer experience, respondents agreed, with 28% saying this would be a key use for the technology. Two thirds (66%) of respondents said new technologies such as AI would drive the development of the global banking industry over the next five years, compared to 42% who agreed with this when asked last year. Separate research published in February by Juniper reported that AI and similar technologies were "crucial" to fighting fraud as online scams became more advanced.

Temenos (SIX:TEMN), the banking software company, expanded its financial crime mitigation product to include an AI-based Suspicious Activity Prevention solution protecting banks and their customers from fraud. Demand for financial compliance and the increasing levels of financial crime are putting huge pressure on banks. Their legacy processes have grown so complex with a high level of manual work for screening alerts and other fraud mitigation activities. Each manual step is inefficient and prone to errors. High level of false positive rates exacerbate this problem.

According to the 2018 Global Retail Banking Report from The Economist Intelligence Unit and Temenos, global banking organizations are focusing on advanced technologies, customer experience and security of data in their efforts to keep pace with consumer expectations. At the same time, many have conceded the battle for payments to fintech and big tech organizations. Subscribe to The Financial Brand via email for FREE!As the banking industry continues to move more transactions to digital channels and adjusts the technology used in back-office operations, costs are being reduced, productivity is increasing and response to risk and compliance needs are improving. As a result, and for the first time in its five-year history, the annual Economist Intelligence Unit survey on the future of retail banking, conducted for Temenos, shows that global bank executives are now more concerned with technology-driven trends than they are by regulation. About 58% of respondents in the survey said "changing customer behavior and demands" will have the biggest impact on retail banks in the years till 2020, citing a survey of 400 senior banking executives across the globe.