How RBC Uses AI To Help Clients Manage Money

Historically, bank-driven personal financial management (PFM) solutions have been met with a lackluster reception. Rami Thabet, Royal Bank of Canada’s VP of Mobile, tells PYMNTS how AI is changing that, helping banks generate actionable advice that puts consumers in control of their finances and even helps them save. This month’s issue of the Digital Banking Tracker digs into that issue, as well how FIs are investing in APIs and Open Banking initiatives.

When it comes to financial planning, everyone wants to make smarter choices. Whether it’s saving smarter, spending smarter or just being more aware of their financial status, many consumers are eager for tools that can make their money management skills even sharper.

It’s not just consumers, though. Smarter financial management is also important to businesses looking to get a leg up on their competition. Now, thanks to artificial intelligence (AI), financial products can not only help customers save, but also help them spend smarter too.

That’s the approach Royal Bank of Canada (RBC) is taking with its own initiatives. Last year, the company launched a pair of AI-powered programs aimed at helping customers save money by analyzing and tracking spending and providing insights into their spending habits.

PYMNTS recently caught up with Rami Thabet, RBC’s vice president of Mobile, who explained how the bank reviews volumes of data to find actionable intelligence it can use to empower customers, helping them exercise greater control over their finances. He also discussed where RBC sees opportunities to integrate voice-activated technology solutions like Apple’s virtual assistant Siri into customers’ everyday banking activities.

From Artificial to Financial Intelligence

To better serve its customers, Thabet said it’s necessary for RBC to get to know them and their spending patterns on an individual level. In pursuit of that venture, the company launched a pair of AI-powered services in August 2017 under the bank’s NOMI program — a play on the phrase “know me.”

RBC’s first service, NOMI Insights, uses AI to review a customer’s daily financial spending habits and offers a breakdown of how much he or she spends in certain categories, such as food, transportation or telecom. NOMI Insights also detects changes in how much is spent on each category over time. Meanwhile, NOMI Find & Save uses predictive analytics to determine how much money a user can afford to put into a savings account.

According to Thabet, RBC’s AI strategy focuses on using AI-powered algorithms to scour volumes of users’ data and help them make improvements to their daily financial lives. The AI-backed services are available to all company clients who choose to opt in. Once they do so, the algorithm highlights and displays their financial habits in the bank’s mobile app.

“What this does is it immediately brings those insights to your mind’s eye, making them more relevant,” Thabet said.

Speaking to his own experience, Thabet noted the NOMI Insights service pointed out his personal home insurance bill was 10 percent higher than it had been a year earlier. Because the service highlighted the payment increase, it prompted him to investigate how much he was paying, ultimately leading him to switch insurance providers.

RBC’s intention is to use AI to help its customers make more informed financial decisions by quickly analyzing and presenting their information, Thabet explained.

“These types of unique insights are triggering people to be a little more mindful of their finances,” he said.

Additional AI Applications

Along with putting AI-powered insights into consumers’ mobile devices, Thabet said RBC sees additional opportunities to let AI and virtual assistants like Apple’s Siri and Amazon’s Alexa collaborate on banking services. The company already allows customers to use Apple’s Siri to perform a variety of banking functions using voice commands, including checking balances, paying bills and making peer-to-peer (P2P) transfers.

“We see a lot of value and a lot of promise with AI and voice combined,” he said.

But beyond the individual banking customer, Thabet expects AI to help small- and medium-sized businesses (SMBs) manage their own financial needs. For example, the service can quickly review a company’s financial habits and offer advice to help better manage cash flows. It can also be used to determine previous cash flow patterns, allowing business owners to prepare in advance and avoid having low levels of capital.

“The power that AI can unleash for the small business community and the commercial community is immense,” Thabet added.

As such, RBC has been aggressively investing in AI-based solutions. In the last year, alongside the NOMI AI initiatives, the bank announced plans to open a Borealis AI lab in Montreal with the goal of hiring 10 researchers in the first year.

And, in addition to RBC’s efforts, Thabet explained that the growing number of global banks moving forward with AI investment strategies to help customers is a positive sign of times to come. Having a broad group from across the industry investing in tools like AI and voice-activated services would help end users unlock greater financial insights — and it could lead to the innovation of new banking capabilities too.

“AI is proving to be really foundational at this time by being able to run through vast amounts of data and provide value for clients who have typically struggled at managing finances,” Thabet said.

For those who’re worried they might not be able to make smarter financial moves, AI is becoming more readily available to help them fulfill their hard-to-keep resolutions.

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    The Digital Banking Tracker™ brings you the latest news, research and expert commentary from the FinTech and consumer banking space, along with the rankings of more than 300 companies serving or powering the sector.