RBC is building AI into its mobile banking app

Canadian bank customers just got another reason to shy away from third-party personal finance apps. The country's largest bank, the Royal Bank of Canada, this week went live with automated personal finance and budgeting capabilities within its mobile app. It's more evidence of a major shift in what mobile banking means to consumers, as banks build in features that tell customers how they've been spending their money, or automatically take their spare cash and put it in a savings account. "These are capabilities that don't just look into the rearview mirror," said Peter Tilton, RBC's svp of digital. "What we've done is integrate AI to offer our customers a forward view." RBC is using an artificial intelligence tool it calls NOMI, based on technology developed by Personetics, a company that works with banks on artificial intelligence-powered customer service products. Tilton explained that it offers two primary features: NOMI Insights, which offers insights and advice into a customers spending habits; and NOMI Find and Save, which monitors spending habits and determines how much it can safely tuck away into a savings account. With the customer's permission, it automatically puts savings into an interest-bearing savings account -- a product that Tilton said it will take the customer seconds to create within the mobile app. "NOMI Insights offers consumers bite-sized bits of advice provided in a timely manner in the RBC mobile app," said Tilton. "What the engine does is allows us to look at a history of customers, for example, saying 'you've been paid less' or 'you've used your credit card at a merchant you've never stopped at before.'" While PFM apps like Digit and Qapital let customers save towards pre-defined goals, RBC customers won't have to download an additional app to enable NOMI's capabilities. It marks a big change for mobile banking, putting PFM into the center of the mobile experience, says one analyst. "So far, a lot of things we've seen are almost using PFM as an add-on to online banking as opposed to being at the front and center of the digital banking experience," said Aite Group senior analyst David Albertazzi. "A lot of the deployments we've seen out there are PFM tabs within online banking, but here, it's taking it to the center stage and to a certain extent, PFM is becoming online banking." Though Personetics has been working with other banks on similar products (reportedly Wells Fargo as well), this is the first such action for a Canadian bank. The inevitable question for industry watchers is what this means for startups. For Albertazzi, banks getting into PFM is good news for startups, as banks can work with them to integrate the technology and can disseminate it to their customer base. Others in the space say the future path for PFM startups will depend on the extent to which banks open up their APIs to third-party developers (a concept called "open banking"). Martin Häring, CMO of banking technology company Finastra, said that European banks are far ahead of North American banks on open banking. So unless North American banks open up their APIs, he said, PFM startups may be dependent on one-on-one arrangements with banks to share customer data. "It depends on how quickly open banking catches on, and what open banking means in terms of a strategy -- if banks see it as an opportunity and not a threat," he said.