The banking industry is undergoing a radical transformation. If you’re thinking that traditional institutions still rule the roost, think again. Digital-first banks—like Boost, Tyme, and UNO Digital Bank—are using Generative AI (GenAI) to race ahead, creating an entirely new era of banking. They’re offering faster, smarter, and more personalized services that traditional banks, shackled by outdated systems and slow-moving regulations, are struggling to match.
What’s even more striking is that this isn’t just a futuristic vision—it’s already happening. According to McKinsey, GenAI could inject $200 billion to $340 billion annually into the banking industry, boosting profitability by as much as 15%. Digital-first banks are already tapping into this potential, leveraging AI to create efficiencies, improve customer experiences, and scale faster than legacy players ever could.
So, how are they doing it? .
Let’s take a deeper dive into how these digital disruptors are leveraging AI to revolutionize banking.
Breaking Free from Legacy Constraints
Traditional banks have a serious obstacle to overcome: legacy systems. These old-school infrastructures are like massive ships—difficult to steer, slow to change, and often stuck in outdated modes of operation. In contrast, digital-first banks like Boost, Tyme, and UNO Digital Bank are built with agility at their core. They don’t have decades of old systems to overhaul—they’re born digital, designed for speed and innovation from the ground up.
Take Boost, for instance. Operating across Southeast Asia, Boost has seamlessly integrated conversational AI into customer interactions via WhatsApp. This isn’t just about chatbots—this is about creating a frictionless customer experience that simplifies everything from onboarding to loan applications. Karthik Bhaskaran, Boost’s CTO, highlights how AI enables them to scale customer support and service while keeping overhead low. Boost, in essence, is a digital-first powerhouse that never had to worry about legacy baggage—allowing them to innovate quickly and meet customer needs faster than traditional banks.
For digital-first players, the freedom from legacy systems gives them the speed and flexibility to adopt new technologies as they come. This is something traditional banks are still grappling with, as they face the monumental task of modernizing old systems and processes. The race to innovate is on, and digital-first banks are currently leading the pack.
Suggested Read: Enhancing Credit Unions: The Imperative of Conversational Banking
Personalization at Scale: The GenAI Advantage
In an age where customer experience is everything, personalization has become a non-negotiable expectation. Consumers want services that feel tailored to their needs, their habits, and their lifestyle. GenAI makes that possible in a way that traditional banks are struggling to replicate. Digital-first banks are using AI to hyper-personalize their services—offering a level of customization that’s not just reactive, but proactive.
Tyme exemplifies innovation by analyzing customer behavior in real-time, enabling it to offer relevant financial products exactly when customers need them. By customizing loan offers based on spending habits and anticipating needs before customers even realize them, Tyme ensures every interaction feels timely and personalized. This goes beyond traditional personalization—it's about creating proactive, needs-based customer experiences.
UNO Digital Bank takes it even further. They’ve tapped into AI-driven underwriting to provide credit to people traditionally excluded from traditional banking systems. Through GenAI, they’re using alternative data sources, such as device information and bank statements, to offer credit to a much broader group of people. Kalidas Ghose, UNO’s Chairman, points out that AI allows them to move beyond the narrow credit scoring models traditional banks rely on, providing more inclusive and personalized services.
What these digital banks are showing is that personalization isn’t just about giving customers what they want—it’s about anticipating what they’ll need next. With GenAI, they can create hyper-tailored financial products and services that feel more like a partnership than a transaction.
Recommended Read: This Conversational AI Bundle Helps Credit Unions Enhance Member Experience and Grow Revenue
Efficiency and Automation: A New Era of Operational Excellence
When you hear about efficiency in banking, it often sounds like a buzzword. But for digital-first banks, it’s a tangible advantage. They aren’t just streamlining operations—they’re reimagining how banking workflows should work in an AI-powered world. By automating routine tasks, digital banks can free up resources and refocus on higher-value services, all while reducing operational costs.
Tyme automates a surprising number of tasks. For example, they handle subpoenas and legal requests through AI, a once tedious process that requires significant human resources. Now, it’s handled quickly and efficiently, allowing employees to focus on more strategic tasks and customer service. The result? Faster, more efficient service, without sacrificing accuracy or compliance.
Meanwhile, UNO Digital Bank uses predictive analytics to optimize credit risk assessments and decision-making, allowing them to make lending decisions in real-time. By automating these processes, UNO cuts down the time it takes to offer loans and services, speeding up their entire operation.
These banks are showing that efficiency isn’t just about cutting costs—it’s about creating more intelligent, streamlined processes that enhance the customer experience while reducing friction.
Customer Acquisition: AI-Driven Success
Customer acquisition is one of the most critical metrics for any bank, but digital-first banks have a significant advantage. They’re using AI-powered marketing to run sophisticated, real-time A/B tests and optimize customer engagement like never before. This level of agility is something traditional banks can’t replicate, and it’s giving digital players an edge in the market.
Tyme is using AI-driven marketing campaigns to better understand customer preferences and tailor messages accordingly. By testing multiple approaches simultaneously, they can refine their messaging in real time, ensuring they hit the right note with each potential customer.
On the other hand, Boost uses conversational AI to engage potential customers via platforms like WhatsApp, guiding them through the sign-up process and answering questions without the need for human intervention. The result is not only a better experience for the customer but also a much lower cost per acquisition. By streamlining customer acquisition processes, Boost is able to expand quickly without the overhead costs associated with traditional banks.
These digital-first banks are revolutionizing how to acquire and engage customers. The key here is that AI allows them to focus on building relationships rather than just pushing products. Customer acquisition is not just about gathering leads—it’s about nurturing them into long-term, loyal relationships.
The Future of Banking: Powered by GenAI
The future of banking is happening right now. Digital-first banks are setting the stage for a new era—one where efficiency, personalization, and automation are the core pillars. With the help of GenAI, these banks are shaping the future of finance, offering smarter services and a better customer experience.
For digital-first banks, the road ahead is packed with opportunities. From decentralized finance to predictive analytics, the potential applications of GenAI are limitless. The innovative momentum these banks have created is only going to accelerate as they continue to push the boundaries of what banking can be.
For traditional banks, the writing is on the wall. Adaptation isn’t optional—it’s essential. The competitive advantages that digital-first banks have gained through GenAI are significant, and legacy institutions need to catch up fast or risk becoming irrelevant.
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The Way Forward: Embracing the AI Era in Banking
The digital banking revolution isn’t just a passing trend—it’s a glimpse into the future of finance. For traditional banks, this is a wake-up call to embrace agility, innovation, and customer-centric strategies powered by AI. The good news? It’s not too late to leapfrog ahead.
By investing in AI-driven solutions, banks can modernize their operations, enhance customer experiences, and gain a competitive edge in a rapidly evolving market. Tools like conversational AI, predictive analytics, and automated workflows can help create smarter, more personalized services without the need for massive overhauls.
The journey starts with strategic decision-making. Leaders must identify high-impact use cases, streamline legacy systems, and foster a culture of innovation to unlock AI’s full potential. Whether it’s simplifying customer interactions, improving risk management, or scaling personalized services, the opportunities are boundless.
If you’re ready to accelerate your journey, solutions built for banking innovation like Kore.ai’s BankAssist can offer a solid foundation. With pre-built use cases and seamless integration capabilities, these tools provide a quick and effective way to harness the power of AI. Explore what’s possible, take bold steps, and lead the transformation of modern banking.
The AI era isn’t just arriving—it’s already here.
👉 Will you be ready to meet it head-on?
