How AI is changing banking without losing the human touch

Many people begin their day by talking to their phones, asking questions or receiving personalised suggestions – often without realising that they are interacting with artificial intelligence (AI). For example, someone may ask their iPhone, “Good morning, Siri. What’s the weather like today?” This invisible but transformative technology is becoming an integral part of people’s daily lives – and banking is no exception.

The global banking sector is undergoing profound change, shaped by digitalisation, increased competition from fintechs, rising customer expectations and evolving regulatory demands. At the heart of this transformation lies AI – a technology that is redefining internal operations and revolutionising the way in which banks interact with their customers.

AI enables greater personalisation, real-time decision-making, improved fraud detection and automation of complex processes. But beyond efficiency, it also holds the promise of increased financial inclusion, better risk management and more resilient, long-term business models.

 “The rise of artificial intelligence is not just transforming how we work: it’s reshaping how we live and learn,” says Ana Botín, Executive Chair of the Madrid-based Banco Santander. “This shift brings enormous opportunities to enhance productivity, boost competitiveness and create new value.”

According to a 2025 KPMG study, 82 per cent of banks globally are already allocating a significant portion of their technology budgets to AI, and 70 per cent plan to increase this investment further. However, while most institutions focus on operational gains, real value will come from balancing technological efficiency with human connection.

Technology with purpose

Across the global banking sector, institutions are embracing AI and machine learning to drive innovation, with a clear focus on customer value and responsible implementation. In customer service, virtual assistants are being used to help answer frequent questions and support both clients and frontline employees, improving service quality and speed. AI is also enabling greater personalisation by tailoring product recommendations and communications to individual needs and preferences. In risk management and fraud detection, machine learning models monitor real-time transactions and assist in faster, smarter decision-making. Meanwhile, robotic process automation (RPA) has been scaled across back-office functions, significantly improving operational efficiency.

As part of a global banking group, Santander Portugal benefits from access to advanced AI tools and platforms, accelerating the deployment of both predictive and generative AI technologies. But innovation isn’t just about tools – it’s about culture. Embracing AI requires new ways of working that are more agile, collaborative and customer-centric. 

Innovation without distance

A common misconception about digital transformation is that it creates distance between banks and their customers. Some banks are taking a different view – that being digital should mean being more present, in simpler, more intuitive and more human ways.

One example is the rise of hybrid branches that combine cafés, free co-working areas and advisory spaces. Santander’s Work Café concept reflects this trend, offering places designed for collaboration as well as banking  to engage with people and businesses in a different way. The goal, increasingly shared across the sector, is to make branch visits a choice rather than a chore – part of a seamless experience that links the physical and digital worlds. 

A human-centred future for AI in banking

AI is already reshaping how banks operate and engage with customers. Yet its real potential lies not only in automation, but in re-humanising the digital experience. Customers want digital convenience, but they also value trusted advice when making major financial decisions, such as buying a home or planning for retirement.

The real challenge is integrating digital and physical into one seamless, human-centred experience. The future of banking lies in being both efficient and empathetic, innovative and inclusive – powered by technology but defined by purpose.