The convergence of open banking and artificial intelligence (AI) is revolutionising the way financial services are delivered and experienced. For Marketers managing incentive programmes, loyalty initiatives, and peer-to-peer recognition systems this is a marriage made in heaven. As with any relationship understanding how these technologies work harmoniously together is key. Here’s a deeper look into how AI, within the context of open banking is reshaping customer engagement, loyalty, and rewards.
What is open banking?
Open banking gives us, as consumers, control over our data. It’s our data, after all! It allows us to provide our secure consent for our data to be used by trusted third-party providers (TPPs) for specific purposes and defined time periods. By opening up this access through secure Application Programming Interfaces (APIs), open banking empowers consumers to have greater control over their financial data, allowing them to make smarter, better-informed decisions and benefit from services that can offer more personalised financial products and experiences.
Open banking drives innovation. The core idea behind open banking is transparency and empowerment for consumers, allowing them to share their financial information with trusted third parties for enhanced services. It’s an ecosystem that thrives on collaboration, partnering with a fintech is the most efficient route to integrate open banking technology and advanced analytics tools – driving innovative product development and enabling your business to lead the market with value. Open banking was born in the UK – you can learn so much more at Open Banking Excellence (OBE’s) knowledge resource hub, delve in here.
What is artificial intelligence (AI)?
There is an avalanche of information on Artificial Intelligence (AI) – the capability of a machine to imitate intelligent human behaviour. AI systems use data and algorithms to make decisions, learn from patterns, and improve their performance over time. In the financial sector, AI encompasses a variety of technologies, including machine learning (ML), natural language processing (NLP), and predictive analytics, which enable more efficient and effective decision-making and automation of tasks.
AI can analyse vast amounts of data—such as transactional data from open banking—to offer personalised recommendations, optimise processes, detect fraud, improve customer segmentation and that’s not all. You’ll benefit from enhanced lead origination, nurturing and qualification too. When integrated with open banking, AI allows for deeper insights and more relevant financial solutions. Transforming the way Marketers engage with customers, anticipate trends, and deliver tailored messages that resonate, ultimately leading to stronger relationships and loyalty.
AI and open banking: revolutionising incentive programs
Incentive and reward programmes are fundamental tools for customer retention and engagement. However, customers are increasingly seeking personalised experiences, and generic rewards just don’t cut it anymore. Here’s where AI can truly make a difference. By integrating AI with open banking data, companies can build incentive programs tailored to individual spending habits and preferences.
For example, Starling Bank, uses AI to offer personalised savings goals and rewards based on the customer’s spending behaviours. This creates a dynamic rewards system where users earn points or discounts on things they actually care about—whether it’s for shopping, dining, or travel—driving greater engagement and satisfaction.
Enhancing loyalty programs with data-driven insights
AI is transforming loyalty programs by enabling smarter, more personalised rewards based on real-time financial behaviour. By tapping into open banking data, brands can better understand how customers spend, segmenting them into meaningful groups—like frequent diners, savvy savers, or premium shoppers—and tailoring rewards accordingly. Cheddar, an award winning fintech, is leading the way in this space. By combining open banking with AI, Cheddar delivers seamless, real-time cashback rewards directly linked to users’ everyday transactions.
Unlike traditional loyalty schemes that rely on points or cards, Cheddar’s approach automatically rewards users for purchases with participating brands —no extra steps needed. This frictionless model not only makes loyalty effortless, but also more impactful. AI analyses customer behaviour to refine offers, ensuring that users receive cashback deals and incentives that are genuinely relevant to their spending habits. By using AI and open banking together, platforms like Cheddar are reimagining loyalty for the digital age—making it smarter, faster, and more personal than ever before.
Peer-to-peer recognition programs powered by AI
Peer-to-peer recognition is a powerful tool for employee engagement, especially within the context of corporate rewards. AI, paired with open banking helps create recognition systems that offer financial-based rewards that are personalised to individual preferences. Open banking is implemented in over 80 countries globally – a leading healthcare technology uses AI to not only recognise employee achievements but also incorporate data-driven financial rewards such as gift cards or experiences that align with individual interests.
By analysing employees’ behaviour, achievements, and preferences, AI ensures the recognition feels authentic and meaningful. Moreover, AI helps track employee milestones and achievements in real time, offering timely recognition. This creates a positive and motivating work environment, driving employee morale and enhancing retention.
Cross-platform integration and customer experience
AI’s ability to integrate data from various platforms is essential in today’s omnichannel world. Open banking allows financial institutions to access transactional data across multiple accounts and platforms, and AI leverages this data to create consistent, personalised experiences across various customer touchpoints. For example, American Express uses AI and open banking data to offer integrated reward points that can be used across different services, from travel bookings to retail discounts. AI ensures these rewards are presented to the customer at the optimal moment, increasing the likelihood of engagement.
While the fusion of AI and open banking brings exciting potential, it also presents important considerations. Data privacy, infrastructure readiness, and regulatory compliance are all areas that require thoughtful attention. But rather than obstacles, these are opportunities to build greater trust and transparency with customers. With secure data-sharing frameworks and clear, user-friendly consent processes, businesses can not only meet compliance standards but also demonstrate their commitment to ethical, customer-centric innovation. By tackling these challenges head-on, organisations can lay the foundation for smarter, more secure, and more engaging experiences.
Powered by people and precision
The fusion of AI and open banking is set to reshape the landscape of loyalty, incentive, and recognition programmes. By using AI to unlock insights from open banking data, Marketers can deliver personalised rewards, improve customer engagement, and create meaningful experiences. The future of customer loyalty and employee recognition lies in leveraging these technologies to provide tailored, data-driven solutions that meet individual needs and preferences, driving both satisfaction and long-term loyalty. Although AI is making headlines, Open Banking Excellence (OBE) is not new to the field. In fact, our first Campfire on open banking and AI converging was several years ago.
We advise business leaders around the world on strategy, policy, and delivery and how to get things done across all three. We’d love to continue this conversation with you — and yes, you’ll be talking to a real person, not just a very clever chatbot (though we think we’re great too). Open Banking Excellence (OBE) is a trusted advisor partner for business leaders around the world in open banking and open finance. The founder of the UK’s first EMI to be awarded licenses from Visa and Mastercard providing a unique insight into your evolving industry.
Helen is the Founder of Open Banking Excellence (OBE), now the world’s leading community of Open Banking and Open Finance pioneers from across the breadth of financial services. From this world class talent pool ‘Open Banking in a Box’ advisory service was born. Known for global delivery of regulatory expertise and resourcing open banking projects around the world – helping business leaders, regulators, and governments to get things done. Working with innovators, leaders and pioneers in the UK and across the world, Helen is committed to connecting changemakers to enable collaboration to maximise impact and growth.
Throughout her career, Helen has always operated at the leading edge of innovation. After founding the first e-Money Licence Issuer in the UK to be awarded licences by both Mastercard and Visa, Helen moved into Open Banking as the UK’s world-leading ecosystem was taking shape. Helen sat on the Counsel of Lancaster University and is a founding member of the University’s InfoLab. During the rare quiet moments in an action-packed agenda, Helen enjoys cycling and running along beautiful Morecambe Bay.
