The annual inflation rate is close to dipping below 3% for the first time since 2020. But bank customers in the US have yet to see major improvement in their financial situations.

The percentage of US bank customers that are financially healthy remains near an all-time low, according to JD Power. Meantime, new concerns are cropping up with the emergence of artificial intelligence (AI) in the financial services sector. And despite many of these AI-driven tools offering help to customers, many are hesitant to trust the technology.

Financial woes continue

Customers’ financial health remains at a standstill. Nearly one-third (30%) of respondents are financially healthy, while 46% fall into the vulnerable category. These numbers are in line with the previous four months.

Customer sentiment regarding financial health status, stress levels and empowerment to improve one’s financial situation also remain virtually unchanged month-over-month. A small silver lining. Customers extremely worried that the prices for common goods will continue to rise dropped to 37% from 40% in January.

The more you know: AI edition

Many industry analysts expect 2023 to be the year when Gen-AI will make a meaningful difference in consumers’ lives. Banking customers in the US are sceptical. More than one-fourth (28%) believe AI (either generative or machine-learning/algorithmic) will make their lives better. Some 17% think it will make their lives worse and 24% say they don’t know.

Familiarity with AI matters, as nearly half (48%) of customers that were very familiar with AI thought it would make their lives better vs. 6% of those who are not at all familiar with AI. Customers of the largest and online-only banks are more familiar with AI than customers at credit unions or local banks.

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The hesitant adopters

More proof of customers’ unease about AI is their willingness to let this technology play out before they try. Many of these options are broadly available to customers. Anywhere from 14% to 26% of customers (depending on the application) say they would not use AI for financial applications. Those include using facial recognition to withdraw money (26%), using tools that automatically change or update investment portfolios (21%), and using an AI bot to help find the best mortgage, auto loan or personal loan rates (18%).

Customers are more willing to set aside their security worries or AI fears when the tools make an immediate impact on managing their financial lives. The percentage of customers that would never use AI tools was the lowest (10%) when it would them avoid fraud.

Trusting the machines

When it comes to AI, customers seem perfectly content to let someone else be the guinea pig. But, considering the current financial landscape, they might want to be early adopters of a tool that can move money from one fund to another if AI can read or anticipate trends that might keep more of their money safe.

JD Power stresses the need for banks to educate customers about these tools get customers to buy in. AI can be a gamechanger for underwriting loans, managing money, and streamlining time-consuming processes. But it will all be for naught if customers don’t trust it. The banks that can boost awareness and put their customers’ minds at ease on AI stand to make major gains.