Customer Identity: The Foundation for AI-Infused Retail Banking Growth

This IDC Perspective discusses retail banking that is rapidly evolving, with AI-powered personalization becoming essential for customer engagement and growth. However, fragmented identity systems create friction, weaken security, and limit AI's ability to deliver seamless and compliant experiences. Customers expect secure, intuitive interactions, but outdated authentication processes lead to frustration and inefficiencies. Banks need a unified identity that consolidates identity data, enabling AI-driven automation, personalized insights, and improved fraud prevention. Banks that prioritize identity modernization will enhance engagement, streamline operations, and ensure regulatory compliance, while those that delay risk falling behind in an AI-driven future."Outdated identity systems don't just create security risks — they also limit a bank's ability to scale AI-driven services and drive sustainable growth. Without a unified identity framework, fraud prevention becomes overly rigid, compliance efforts remain reactive, and seamless customer interactions are impossible. Banks that modernize identity management will not only enhance security and compliance but also unlock new growth opportunities by enabling AI-powered automation and personalized engagement at scale." — Sam Abadir, research director, Risk, Financial Crime, and Compliance, IDC"Customer identity is the foundation of growth in AI-powered banking. Banks that fail to streamline authentication and unify identity data risk losing customers to competitors that offer frictionless, personalized experiences. A modern identity framework ensures seamless interactions, builds trust, and allows AI to deliver real-time insights and tailored financial services, ultimately driving deeper customer relationships and lifetime value." — Marc DeCastro, research director, Consumer Banking Engagement, IDC