Singapore banks up AI game in apps with expenses tracking for retail customers

Singapore's digital banks are ramping up their AI game to enhance customer experience, particularly through features that track spending for retail customers. Trust Bank has launched an AI chatbot in its app, enabling users to ask questions about their transactions using natural language. This feature aims to streamline tasks that were previously manual, such as reviewing spending on specific merchants or overseas purchases, as well as categorizing expenses like transport and dining.

Trust Bank, backed by Standard Chartered Bank and FairPrice Group, plans to expand the AI chatbot to cover a broader range of banking activities, including account information, transfers, and rewards.

DBS Bank and OCBC Bank are also planning to introduce similar AI tools in their digital banking apps later in the year. DBS plans to roll out its AI-powered digibot to retail customers by November, allowing them to interact with the virtual assistant to check refunds, request fee waivers, and even block or replace cards. DBS's digibot was previously introduced to corporate customers in July and received an upgrade in August, enabling it to handle wealth management-related queries for retail customers.

OCBC has unveiled its AI-powered app, OCBC WoW, which uses digital representations of employees as virtual client managers to provide wealth management services. Customers can converse with the virtual managers using voice or text, and the app analyzes their investments to help them understand their risks and exposures. OCBC plans to test an AI-powered digital companion on its banking app, which will provide personalized insights to selected retail banking customers by the end of 2026.

According to Tamma Febrian, director of financial institutions ratings at Fitch Ratings, the deployment of advanced technology capable of analyzing live data sets and offering natural-language capabilities enables banks to provide a more seamless customer experience. Previous chatbot and investment advisory functionalities were limited to repetitive queries and a limited set of rules, but the new AI features offer more flexibility and natural language processing, leading to enhanced convenience for customers.

Zennon Kapron, director at GL Insight, notes that AI features in bank apps offer potential time savings for customers, as well as cost savings for banks, as they can handle customer queries without routing them to customer service or relationship managers. However, Kapron also acknowledges that the AI features in bank apps are not entirely new, as category breakdowns, spend trackers, and investment nudges have been present in banking apps since UOB launched its AI-powered Mighty app in 2019.

The AI features in bank apps have evolved over time, with a shift towards customers asking questions in their own words for replies. This approach lowers the barrier to entry for customers to understand their financial data. Moreover, the cost of integrating a natural-language layer over existing data held by banks has fallen with advancements in AI.

As a result, multiple banks have introduced AI features within a few months of each other, as transaction data has been available in banking apps for several years. These AI features can help banks boost earnings growth through cost savings, wealth management services, and fee income from various banking services. However, as AI features become more widespread across the sector, they are becoming expected utilities for banks to offer, rather than a competitive advantage that could significantly impact their franchises.

Analysts agree that the true value of AI initiatives lies in their ability to translate into good cost-to-income ratios, product sales, and deposit stickiness.