According to the Bank of England, 75% of UK firms within financial services are currently using AI, with a further 10% planning to incorporate it within the next three years.

It’s likely you already use some form of AI regularly — even if you don’t realise it. And in the next decade, there will be endless ways it’ll be incorporated behind the scenes into the products and services you interact with daily.

For businesses, AI’s seemingly endless potential is both exciting and daunting. Where do you start when its possibilities are so vast? As financial services become more personalised, intuitive, and accessible, AI will reshape how we interact and view our finances. One way this is already happening is by combining open banking with AI-powered services, delivering instant insights based on the analysis of granular, real-time bank data.

In this article, we explore:

• How AI and open banking are currently transforming financial services
• AI and open banking’s impact on driving towards open finance
• Why you should consider open banking data services from Yapily to boost your AI-powered solution.

It’s all about the data: How AI and open banking are transforming financial services

One of the core aspects of open banking is third parties being able to access customers’ bank account data through account information services (AIS), also called open banking data. With their given permission, customers can share their financial data with a business by directly linking to their bank account using an API. This provides faster, more detailed, and more specific data than screen scraping or manual document uploads could ever achieve. It’s also much more secure and less prone to fraud, ensuring customer data is protected.

This is precisely why it’s an excellent match for AI-powered solutions — for AI to perform at its best, it needs access to strong and accurate data. The more granular, the better. As Gonçalo Ribeiro, CEO of YData, wrote in Forbes.com, “Garbage in, garbage out. In terms of AI, that translates to bad training data gives bad results”. AI’s capability to interpret financial data instantly, means services that were once provided by humans, like accounting and consulting, can be done using AI programs in a matter of seconds, with a much more holistic view than a human could ever get. But to provide this value, the models need good quality, detailed data.

To show you precisely how open banking and AI can work together to supercharge financial services, we’ve explored some specific use cases so you can find the perfect match for your business.

Enrich your approach to personal finance management

Combining AI and open banking data services can deliver the insights and recommendations your users expect from your personal finance management (PFM) platform, enabling a more convenient and affordable way for them to manage their finances than paying for a financial advisor. As open banking data services become more accessible and sophisticated, and AI develops further, these capabilities will only grow.

However, there is a key way you can enhance the impact of your AI model on your PFM platform right now — using enriched AIS data. Data enrichment provides a much deeper and more granular data set than normal AIS can provide, offering more in-depth insights such as normalised merchant names and precise transaction categorisation. This gives your platform much more detailed and complete data for the AI model to analyse and provide insights and potential recommendations to customers, offering them a much deeper understanding of their spending habits and unlocking new capabilities for your service.

Enriched financial data provides additional labeled attributes and contextual signals — such as merchant categories, transaction types, or recurring patterns — that allow AI to generate more precise, actionable recommendations. This added structure turns raw transaction streams into a richer input layer for downstream tasks like personalised financial advice, savings optimisation, or portfolio suggestions.

For example, the AI model could use enriched data to show the split of a user’s spending on certain restaurant chains over a month or the split of spending across clothes brands in a defined period. The AI model could then make informed recommendations on how users can change their spending habits to save money. For example, suggesting they could make meals from their favourite restaurant chain at home and then going the extra step to provide them with recipes of the most popular dishes on the menu. Or, it might suggest that they could save about 40% on clothes if they switched to another, less expensive clothing brand with similar styles.

Another example could be the ability for users to ask their PFM app’s AI assistant, “On average, how much idle cash typically remains across all my bank accounts just before pay-day each month?” The AI model can then analyse their balance and transaction history using open banking to give them the answer in seconds. They can then command the AI model to set up recurring payments to move idle cash to more profitable accounts or investments each month, making their money work harder for better financial management.

In this sense, enriched open banking data allows you to utilise AI to its full potential, delivering a much more personalised experience for users that allows them to manage their finances on their own terms, and with all the data they need at their disposal.

Dramatically improve your lending decisions and customer experience

If you’re a lender looking to streamline your processes and increase your customer base, combining the power of AI with open banking data offers you an opportunity to do both. By utilising AIS, you can receive an instant and completely up-to-date history of a customer’s transactions across all their bank accounts. This data can feed your AI model with preset parameters to deliver an instant decision based on a complete and accurate picture of their finances, providing a financial credibility score that’s highly accurate and outperforms legacy credit underwriting methods. This service is a far cry from relying on a limited set of bank statements which can be easily manipulated and certainly don’t provide enough historical data to make a well-informed decision. By gaining a deeper understanding of an applicant’s financial situation, you can build more tailored lending plans, helping you win more business while simultaneously reducing the risk of your customers defaulting on their loans.

Additionally, AI can take loan decisioning one step further, providing instant analysis and explanations as to why someone didn’t qualify for a loan, and even what changes they could make to qualify in the future. Just like with PFM platforms, lenders can also benefit from enriched open banking data. By intelligently analysing data on a case-by-case basis, AI combined with enriched open banking data makes applicant risk assessment much more personalised, enabling you to provide better rates to low-risk applicants and recommendations to rejected applicants with better precision and certainty. For your business, this translates to significant savings in operational overhead, higher customer retention, and a vastly improved user experience that virtually eliminates the possibility of human error in the decision-making process. With a constant stream of rich, real-time data feeding your AI models, you can provide even more accurate predictions and a stronger, more resilient lending portfolio.

Strengthening fraud monitoring and security in financial services

If you’re working in a regulated industry like finance or gambling, you’ll know all about the headaches that fraud monitoring and anti-money laundering (AML) duties cause. The truth is that as regulations get tougher, the criminals get smarter, finding new ways to wash money or commit scams against unsuspecting businesses and their customers — and the fallout can be disastrous.

Although AI has been touted as another tool in the fraudster’s arsenal, it’s also being used to strengthen AML, know your business (KYB), and know your customer (KYC) processes. By identifying suspicious patterns and anomalies in financial activities, AI can assist in uncovering various forms of fraud, including instances where individuals misrepresent their income or create fictitious identities. That’s where open banking can really add value. Using AIS, open banking can provide quick and validated access to a business or individual’s financial accounts. AI can then use this data to scrutinise and identify suspicious activity and transaction patterns based on learned behaviours developed through machine learning. This provides a more holistic approach than traditional AML and fraud prevention methods, enabling you to instantly identify more complex trends and patterns that are markers for dubious activity.

AI also enhances the effectiveness of strong customer authentication (SCA), which in turn helps to lower the chances of identity theft. Additionally, as the AI uncovers more and more suspicious activity, it’ll learn new ways to identify it, meaning criminals will need to keep up with you, rather than the other way around. Consequently, leveraging both AI and open banking offers a fraud prevention strategy that is not only more precise but also more flexible and capable of handling increasing demands. Integrating AI and open banking to reinforce AML and KYB/KYC responsibilities means your compliance team has a more robust tool to fight criminals looking to take advantage of your business.

Open banking and AI: Laying the groundwork for open finance?

The impact of combining AI and open banking is only in its infancy, but it’s clear that there are already strong use cases developing. Looking ahead, we can anticipate even more profound changes that will reshape the financial landscape, opening the door to open finance.

Open finance is the evolution of open banking. In broad terms, it includes expanding the scope of data sharing beyond just current and savings accounts to include a much wider range of financial products and services. This encompasses investments, mortgages, loans, pensions, insurance, and more. While the term is still loosely defined, open finance aims to give individuals a more holistic view and better control over their entire financial lives (rather than just banking) by allowing secure data sharing with authorised third-party providers.

Fusing open banking with AI can help catalyse the transition to open finance. Imagine a future where AI models, fueled by comprehensive financial data from various sources (thanks to open finance), can offer truly personalised and proactive financial advice. Instead of just analysing your spending habits from your bank account, AI could assess your entire financial portfolio, including your investments and pension plans, to provide tailored recommendations for optimising your long-term financial health.

This could include better insurance deals based on your specific needs and risk profile, optimal investment strategies tailored to your goals and risk tolerance across different platforms, or even proactively managing your debt by identifying opportunities for consolidation or refinancing. With open finance providing verified access to your entire financial portfolio, AI could even analyse your entire financial landscape to provide a single, unified view of your net worth and financial projections at any one time, making complex financial planning accessible to both consumers and businesses of all sizes.

Combining open banking with AI is a must for companies wanting to take an early lead in this field. What we’re seeing right now is just the start of a new era for finance that’s more open, intelligent, and deeply personalised, promising a system where managing our financial lives is seamless, intuitive, and ultimately, empowering.

Why you should consider Yapily for your AI-powered financial service

If you’re currently leveraging the power of AI to enhance your digital financial service, or if you’re planning to integrate AI into your offering, then access to reliable and comprehensive open banking data might give you the competitive edge you need. That’s where Yapily comes in. We’re a leading open banking platform that provides seamless and secure access to customer financial data across hundreds of banks in multiple countries. Our robust and developer-friendly APIs make it easy for you to connect so your AI model can interpret vast amounts of transaction data, account details, and more.

By partnering with Yapily, you can:

• Enhance the accuracy and insights of your AI models: Fuel your service with real-time, granular financial data for more precise analysis and predictions — including the option for enriched data with our Data Plus solution.
• Expand to new markets: We operate in nearly 20 markets across Europe as well as the UK, enabling you to roll out open banking-powered services wherever there’s demand.
• Some of the best business account connectivity: If you’re in the B2B space, you’ll be able to access hundreds of business bank accounts, delivering improved financial services to SMEs.
• Deliver both data and payments: Unlike most open banking providers, we excel at both payments and data, meaning you can use our solution for all your open banking needs — there’s no need to look for additional providers.
• Scale your AI solutions quickly and efficiently: Our reliable and scalable infrastructure based on direct-to-bank integrations ensures you can handle growing data demands as your business expands.
• Ensure compliance and security: Yapily adheres to PSD2 and the highest security standards and regulatory requirements, giving you peace of mind when accessing and processing sensitive financial data.

Building the future of financial services with AI and open banking

The combination of AI and open banking is already revolutionising the financial services landscape, creating opportunities for more personalised, efficient, and accessible solutions. For businesses looking to stay ahead of the curve and deliver truly innovative digital financial services, the combination of these two powerful technologies is no longer an option – it’s a necessity.

Ready to discover how Yapily’s open banking platform can empower your AI solutions and help you redefine the future of digital finance? Book a demo with one of our open banking experts today.