Will ‘Predictive Banking’ Fix Financial Literacy? Wells Fargo Hopes So [VIDEO]

EXCLUSIVE—As the technology matures, many banks and fintechs are turning to artificial intelligence, machine learning, and predictive analytics to provide new tools and features, in a bid to increase the financial literacy of their customers.

Wells Fargo, for example, launched a new predictive banking feature into its mobile app this week, which will allow mobile bank deposit customers to receive alerts based around payments, account activity, and expenses.

The tool is geared towards making a user’s data more transparent to that user, Katherine McGee, head of digital product management for Wells Fargo, told Bank Innovation. McGee said in an emailed statement:

Predictive banking aims to break down data in a way that is easy for our customers to understand. The goal is to put more information in their hands so that they have even more control when it comes to making decisions about their finances. Predictive banking is available today to all consumer deposit customers using mobile banking, and we are targeting to roll out to credit card and small business mobile customers later this year.

Wells’s predictive banking tool is one in a long line employed by banks, startups, challengers, and fintechs surrounding consumer financial literacy: financial service companies have employed this type of AI technology to offer everything from push notifications, to overdraft alerts, to fraud management, to budgeting services for their users.

As McGee said, a Wells customer could be notified about a recent deposit or an upcoming payment using the tool—it can also make suggestions based on their financial activity. McGee said:

Whether it’s a reminder to pay a bill or set a travel plan, or prompting a customer to send extra funds to savings, it’s all about making financial health simple.

For example, if a customer receives an incoming deposit which is not in their usual pattern of transactions and is not needed to meet their normal expenses or scheduled payments, we can highlight the deposit and suggest the customer save the funds.

However, just highlighting that deposit may not be enough for actionable change: the question of whether these tools will have a marked impact on customer behavior is one we have asked before, and as of now, the answer is still unclear.

In the meantime, you can take a deeper look at Wells’s tool in the video below:

To learn more about predictive banking and financial literacy, join us on March 5-6, 2018 at the Parc 55 in San Francisco for Bank Innovation 2018. Click here to register.