Your AI strategy is your 2015 strategy, only cheaper

The Singapore Fintech Festival in November sees every bank presenting an AI strategy, but the truth is that most Asian-Pacific bank AI strategies are essentially 2015 strategies with lower costs. IDC expects AI spending in Asia-Pacific to rise from US$121.5 billion in 2025 to US$555 billion by 2030, with financial services being the second-largest spender.

This spending is primarily on fraud detection, compliance, operational efficiency, and contact-center bots, which make banks cheaper and safer to run. However, these are table stakes rather than reasons for customers to choose one bank over another. Customer expectations are clear: personalization influences their bank choice, yet only 3% use the personalization tools offered.

In Singapore, 79% of consumers prefer tailored offerings, significantly higher than the global average. Rewards also matter, with 60% of customers wanting rewards that recognize their relationship with the bank, but only 45% are satisfied with what they receive. The APAC loyalty market is expected to double to about US$60 billion by 2029, driven by cashback and super-apps, not by the unchanged points catalogues of banks.

Banks are staying with customers mainly due to security, but this is mere inertia, not loyalty. Customers aren't staying because banks delight them, but because leaving feels like effort. With over 60% of Southeast Asian transactions now digital and 85% shopping primarily on mobile, a competitor offering genuinely useful services is just one download away.

The deeper problem is that most consumer financial services AI projects deliver modest or no return. While 83% of Singaporeans are open to AI use by banks, only 10% would choose a chatbot for customer service. The issue lies in data: an AI assistant that can't reliably track transactions can't provide accurate cashback, flag duplicate charges, or explain money usage.

Trust erodes when customers notice poor performance. What customers need are plain answers about where their money went, rewards that match their actual purchases, and verifiable explanations. This depends on clean, enriched, deterministic transaction data, which many banks avoid showcasing at events like the Singapore Fintech Festival.

Banks should answer three key questions: Can the app show customers exactly where every dollar went this month? Can the rewards engine prove why a transaction earned or didn't earn cashback, and can customers verify it? Would a customer switch to the bank due to its AI rather than simply staying because leaving is a hassle? The next decade in APAC banking won't be won by the institution with the largest AI budget or the most impressive chatbot, but by the one that uses AI to serve customers, not just cut costs. The customers have made their desires clear, and the question is which banks are listening.