7 Key Trends in AI for Open Banking to Watch in 2025

Key Takeaways:

1. New AI innovations are transforming Open Banking
2. Smoother data flows and greater personalization stand out
3. Detailed insights can drive more intuitive services
4. Customers benefit from greater visibility and control

7 Key Trends in AI for Open Banking to Watch in 2025

At least 100 million Americans have already entered the world of Open Banking by granting third party access to their account data. But as this is only around 30% of the total population, there’s still more to be done to encourage and enable Open Banking adoption.

Alongside cloud computing, artificial intelligence could well be the answer, thanks to the data-rich nature of Open Banking enabling detailed data analysis and insights. This blog explores seven ways in which AI will reshape Open Banking in 2025 and beyond.

Trend 1: Personalized Financial Services

At a time when consumers want more personalized banking services and offerings, artificial intelligence allows Open Banking providers to tailor product recommendations and financial advice. This can extend to personalized dashboards and insights that are attuned to the needs and financial behavior of individual users.

The use of APIs means that third parties and financial institutions can easily and securely share data. This allows them to leverage generative AI to:

Trend 2: Enhanced Fraud Detection and AI Cybersecurity

With cybersecurity protection becoming more and more important all the time, AI can support two vital security functions that help keep funds, users and data safe.

The first is in fraud prevention, where AI can detect unusual patterns of activity and flag up anything anomalous for further review. The self-learning capabilities of these models mean that suspicious trends can increasingly be picked up on, helping Open Banking providers respond to fraudulent activity earlier.

The second is enabling zero-trust security protocols, where AI tools support constant verification of every access request, and all attempted access is considered unauthorized until proven otherwise. This works in conjunction with AI-driven security monitoring 24/7 that scans for threats that may be undetectable by humans.

Trend 3: Real-Time Data Processing and Insights

Every finance firm deals with very high volumes of data, and only AI can maximize the value of that data by processing, analyzing and driving insights from those large data sets. Not only that, but those insights can be translated into suggested outcomes, therefore aiding better decision-making.

This extra knowledge benefits businesses and customers alike in several different ways, such as:

Trend 4: Advanced Conversational AI for Customer Support

Conversational AI expands the possibilities of the technology by making it easier for customers to interact with AI tools. Adopting Experience Engineering means that this can simultaneously transform user experiences and enhance functionality.

For example, it means that AI can deliver customer service and assistance 24/7, while substantially reducing the cost of customer service provision at the same time. These AI chatbots are improving all the time, and are increasingly able to reach out to customers proactively and deliver more personalized help, including in investments and debt repayments, boosting customer satisfaction and loyalty along the way.

Further easing the process of customers engaging with AI is Natural Language Processing, which mimics human conversation and makes interactions more natural for customers. This works not only for chatbots, but also with virtual assistants picking up voice commands.

Trend 5: Integration of Open Banking APIs and Embedded Finance

API functionality is acting as a real game-changer for Open Banking technology, as they facilitate the smooth flow of data between traditional banking institutions and third-party providers. This ensures that different functions and services can be interconnected, and so that customers get the seamless experiences they expect.

Related to this, embedded finance innovations leveraging AI can help financial services be integrated into other platforms outside of banking. For example, ride-sharing apps where payments are made through digital wallets, or the ability to arrange repayment plans or take out insurance at the same time as goods and services are purchased.

Trend 6: Expansion of Banking-as-a-Service (BaaS) Models

As AI’s ability to deliver flexible financial services and detailed consumer insights has grown, the concept of Banking-As-A-Service (BaaS) has emerged. This includes possibilities such as AI-powered secure payment processing, AI-driven account management, and wider financial wellness and risk assessment tools.

The ease of integrating these technologies within a BaaS model, and the integrated service delivery that it enables, can help drastically reduce the cost of customer acquisition in the finance sector. This cost can often run between $100 and $200 per customer, but can be reduced to as little as $5.

Trend 7: Variable Recurring Payments (VRP) and Autonomous Transactions

Flexibility and control over payments is vital for maintaining customer confidence and satisfaction. AI plays a crucial role in setting automated financial triggers, allowing users more flexibility and control over payments. Increasingly, these triggers will enable autonomous transactions, where payment amounts and timings are adjusted based on real-time account data and better optimized for the customer's financial circumstances.

This idea often comes in the form of Variable Recurring Payments (VRPs), where customers give payment providers permission to make authorized payments on their behalf within pre-agreed parameters. This allows these payments to be adjusted, optimized and personalized in line with circumstances and preferences, while still meeting all financial obligations.

In Summary

What these Open Banking trends collectively suggest is that there’s no time to lose in embracing all the opportunities that AI in Open Banking has to offer. Only those firms who are proactive in adopting these innovations, and differentiating themselves in the marketplace, will stand the best chance of securing long-term competitive advantage. 

Experience Engineering can make a real difference in this regard, which is where the expertise of Ciklum can be invaluable. Contact us today to find out more or arrange a free consultation with our team.