Conversational AI Could Win Back 72% of Bank Customers

As banks face shrinking margins and fierce competition from FinTech startups, a surprising new asset is emerging: conversation.

Artificial intelligence (AI)-driven conversational solutions built atop personalization is becoming a new tool for banks to drive customer engagement.

Findings in the June 2025 Embedded Finance Tracker® Series report, “Beyond the Bot: Why Embedded Conversational AI Is Banking’s Next Strategic Advantage,” a PYMNTS Intelligence collaboration with Galileo, spotlights that nearly three-fourths (72%) of customers say personalization influences where they bank.

In the age of digital banking, this means the most powerful transaction might not be a payment or a loan but a simple question. “Can you help me increase my credit limit?” “What’s this charge on my account?” “How much can I safely spend this month?”

For decades, questions like these were routed to call centers and logged — if at all — as afterthoughts.

But a growing cohort of banks and financial institutions are rethinking the value of customer dialogue. With conversational AI now capable of much more than deflecting calls, financial services are beginning to treat conversation itself as a high-value asset: a gateway to data, engagement, and ultimately, revenue.

From Call Deflection to Value Direction

For much of the last decade, conversational AI in banking has been synonymous with cost savings. The early chatbot revolution was led by virtual agents designed to reduce call center load and improve response time. But as AI has evolved scripted bots into dynamic, context-aware assistants, and its role has shifted from reactive support to proactive value creation.

What’s changed is the capability of conversational systems. Instead of handling only scripted queries, modern AI-driven interfaces — enabled by advances in natural language processing (NLP) and large language models (LLMs) — can now recognize intent, provide context-aware responses and execute tasks across banking workflows. When deeply integrated into digital ecosystems, they can shape the entire customer journey.

The PYMNTS Intelligence report found that institutions from JPMorgan Chase to SoFi are embedding conversational AI within their digital ecosystems to drive transactions, gather behavioral data and nudge customers toward higher-value services. By turning everyday queries into actionable insight, banks are monetizing moments that once disappeared into customer service queues.

These capabilities reflect a broader shift in how financial institutions view conversational AI as a strategic touchpoint for engagement and revenue generation.

Read the report: Beyond the Bot: Why Embedded Conversational AI Is Banking’s Next Strategic Advantage

Conversations as Behavioral Data Engines

A key reason for this shift is the rich behavioral data embedded in user interactions. Unlike traditional interfaces, conversational systems offer a high signal-to-noise ratio. Each query provides insight into user intent, context, preferences and urgency — information that’s often missing from static clickstreams.

Banks are increasingly leveraging this data to refine customer segmentation, personalize offers and prioritize outreach.

The shift to embedded AI isn’t just about modernizing support — it’s about redefining the digital bank branch.

Apps and portals are being redesigned around “chat-first” experiences — where conversational entry points act as the user’s primary navigation tool. This model replaces static menus with dynamic dialogue, enabling customers to express their goals in natural language (“I want to save for a house,” “Show me my subscriptions,” etc.) and receive tailored responses that link to relevant services or tools.

As conversational systems become smarter, more contextual and more tightly integrated into banking workflows, they offer a rare convergence of user experience and monetization. For legacy institutions racing to keep pace with agile FinTechs, the ability to turn dialogue into data — and data into dollars — may be the most valuable upgrade of all.