For the past decade, retail banking technology investments have focused on digitization. Financial institutions modernized channels, automated processes, launched mobile capabilities, and upgraded core banking platforms to meet evolving customer expectations. While those investments were necessary, they are no longer sufficient.
Today, the industry’s challenge is not simply becoming more digital; it is translating technology investments into sustainable customer growth. As consumers increasingly maintain relationships with multiple financial providers, the traditional concept of being a customer’s “primary bank” is becoming less meaningful. What matters now is relevance; which institution is most engaged in helping customers manage their financial lives.
New research from Datos Insights, based on the 2026 Datos Insights Consumer Financial Behaviors Study combining perspectives from 3,500 U.S. consumers and 100 retail banking executives, suggests that the next phase of growth will be defined by three shifts: First, engagement is emerging as the most important indicator of customer value. Second, personalization is evolving from a marketing capability into a trust-building tool. Third, AI and open banking technologies are creating new opportunities to deepen relationships, but only for institutions that can maintain customer trust.
These trends point toward a broader conclusion: Technology is no longer a competitive advantage on its own. Competitive advantage now comes from how effectively technology changes customer behavior.
Historically, banks measured relationship strength through traditional indicators such as account tenure, direct deposit status, product holdings, or balances held in those accounts. While those metrics remain important, they are becoming less predictive in an environment where customers routinely maintain multiple banking relationships. Nearly two-thirds of banking executives now use digital engagement as a key measure of customer primacy, ranking it slightly ahead of many traditional relationship indicators such as product holdings (62%) and customer satisfaction metrics (61%). The reason is straightforward: Data shows that more than seven in 10 consumers access their institution’s mobile application at least weekly, and nearly half engage multiple times per week. For many customers, the mobile app has become the primary branch, advisor, and service center combined. This shift creates both opportunity and risk.
The opportunity is that digital interactions provide institutions with more frequent touchpoints than ever before. Every login, payment, transfer, deposit, and notification creates an opportunity to reinforce value and strengthen the relationship.
The risk is that engagement can no longer be taken for granted. Consumers have unprecedented access to alternative financial providers. Fintech applications, digital wallets, investment platforms, and specialized financial tools compete for attention every single day.
Growth strategies that focus primarily on acquiring new accounts may miss the larger opportunity. The institutions most likely to win will be those that increase engagement frequency, encourage deeper usage of digital capabilities, and become a more consistent part of customers’ financial routines. In many respects, the industry’s competitive question is shifting from “how many customers do we have?” to “how often do customers choose to engage with us?”
Personalization is Becoming a Relationship Strategy
Few banking topics have received more attention than personalization. Yet much of the industry’s early personalization efforts focused on product marketing. Consumers are signaling that they want something different (when asked which attributes matter most in a primary banking relationship, a strong mobile experience ranked first, cited by 55% of consumers). Datos Insights’ research also shows that the most valuable forms of personalization are not product offers at all. Fraud and security alerts, account notifications, cash-flow guidance, and timely financial insights generate greater customer engagement.
This distinction matters because it fundamentally changes the role personalization plays within the customer relationship. When customers receive a relevant product offer, they may perceive it as a sales effort. When they receive an alert that prevents fraud, helps them avoid a fee, or identifies a savings opportunity, they perceive it as assistance. One creates a transaction; the other creates trust. Many institutions appear to recognize this shift. Real-time alerts, relationship-based rewards, proactive guidance, and personalized recommendations have become common components of retail banking strategies. Banking executives also express strong confidence that personalization initiatives are strengthening customer trust.
Consumer behavior largely supports that view. Personalized communications are influencing meaningful financial actions, including increasing savings, changing spending behavior, and prompting customers to seek additional financial guidance. The findings suggest that consumers increasingly value outcomes over products. They are less interested in receiving another offer and more interested in receiving help with financial problems. Historically, customer-centricity often meant expanding choice, but now it increasingly means reducing complexity.
For retail banking executives, the next generation of personalization investments should focus less on selling products and more on delivering financial value. Institutions that can provide relevant guidance at the right moment will likely create stronger engagement than those relying primarily on promotional campaigns.
AI and Open Banking Will Expand the Relationship
Another major finding involves two technologies that are frequently discussed independently but are increasingly converging in practice: artificial intelligence and open banking. AI allows institutions to analyze customer behavior, identify patterns, predict needs, and automate recommendations at scale, which was previously impossible. Open banking enables access to a broader set of financial information, creating a more complete understanding of the customer. Together, these technologies have the potential to transform how banks serve their customers.
The industry’s investment priorities reflect this opportunity. AI-related investments rank among the industry’s most important technology priorities, with 30% of executives prioritizing fraud and financial crime technology, 29% investing in AI for non-customer-facing processes, and 22% investing in customer-facing AI capabilities. Open banking capabilities are increasingly viewed as strategic differentiators or competitive necessities.
Consumers also appear receptive to the value these technologies can create. More than three quarters of consumers report using AI-powered tools at least monthly, while 39% use them weekly or daily. More than half of consumers using financial tools outside their primary institution would prefer to access similar capabilities through their primary bank if available. This represents a significant opportunity for incumbent institutions. For years, the prevailing narrative suggested that fintechs would displace traditional financial institutions by delivering superior digital experiences. While fintech innovation remains important, banks continue to possess one critical advantage: trust.
When consumers consider sharing financial data, consolidating accounts, or receiving personalized financial guidance, they overwhelmingly identify their primary financial institution as the organization they trust most. That trust advantage may ultimately become the deciding factor in determining which institutions benefit most from AI and open banking adoption. The research also highlights important limits: Nearly 45% of consumers say personalized experiences become unacceptable when AI makes decisions without human review, while a similar percentage express concern when personal financial data is shared outside the financial institution. Customers are increasingly willing to embrace intelligent banking experiences, but they still expect transparency, explainability, and control.
Retail banking has entered a new stage of digital transformation. The first stage focused on digitizing products and channels. The second focused on improving customer experiences. The third stage is about using technology to drive customer relevance.
The findings from this year’s research suggest that consumers are looking for institutions that help them achieve better outcomes. They want timely guidance, proactive support, stronger security, and simpler financial management. Technology is becoming the mechanism through which those expectations are met and the institutions that create the greatest value will be those that use technology to become more useful, more trusted, and more deeply embedded into their customers’ financial lives.
To find out more, visit Retail Banking & Payments Insights | Datos Insights.