Case Study: Designing a Gen AI Conversational Banking App

Over the past decade, messaging apps and AI-powered chats have redefined how we interact with the digital world. What started as a way to stay in touch with friends quickly evolved into a universal interaction model.

With the rise of generative AI, this trend has accelerated dramatically. Instead of scrolling through menus or tapping endless buttons, users are beginning to expect natural conversations as the default way to interact with digital services. In this new landscape, chat isn’t just a feature—it’s becoming a primary interaction pattern across industries.

One of our clients came to UXDA to design AI chat-based conversational banking app. Financial services carry complexity, regulation, and emotional weight. Reimagining them through a conversational lens required not just technical innovation, but a complete redesign of how people experience money in their daily lives.

This case study explores how the UXDA team set out to create an innovative conversational banking app, powered by generative AI, designed to feel less like an interface and more like a financial companion.

Challenge: Inventing New Banking Interaction

Conversational AI has set new expectations for how people interact with digital services. Typing commands into rigid forms or navigating endless menus is no longer acceptable—users expect to speak naturally and be understood instantly.

The challenge was to create a full-featured conversational bank—a generative AI–powered assistant capable of handling the breadth of retail banking, but with the emotional intelligence of a trusted friend.

Key challenges included:

• No existing templates or ready-made solutions for a full-featured conversational bank.
• Need to seamlessly blend ChatGPT-like intelligence with traditional banking operations.
• Deliver an experience that feels natural and intuitive, rather than mechanical or transactional.

Our goal wasn’t just efficiency and usability. It was about redefining the emotional relationship people have with money—turning banking interaction into a conversation that feels natural, empathetic, and supportive.

Approach: Designing for Conversation, Not Interfaces

Traditional banking apps rely on menus, icons, and step-by-step navigation. But conversational banking demanded a new paradigm—an interface closer to human dialogue than other digital interface forms.

The design team began by studying the psychology of digital conversations: why people chat, how they expect answers, and how to reduce the friction of searching for hidden features.

Three models were tested:

1. Text-to-Text Chat – minimalistic but too demanding for first-time users.

2. Voice-Only Interaction – convenient but impractical in public or professional settings.

3. Hybrid Approach – combining text, voice, simple navigation, and subtle visual cues.

The hybrid model prevailed, striking the right balance between efficiency, emotional connection, and discoverability.

AI was designed to act less like a tool and more like a companion—recognizing users, learning preferences over time, and proactively suggesting relevant actions.

Expanding the Use Cases: Generative AI in Banking

Beyond the basics of checking balances or making transfers, generative AI opens doors to rich, personalized financial ecosystems.

Here are few use cases designed and explored:

1. Contextual Account Insights

AI explains not just the what (“Your balance is $5,000”) but the why (“Your balance is lower this month due to higher grocery spending, +12% compared to last month”).

2. Emotional Budget Coaching

Instead of stiff “spending alerts,” the AI uses supportive, empathetic framing: “Looks like you’ve been treating yourself more often—shall we adjust your savings goal?”

3. Scenario Simulation

Users can ask: “What happens if I save $300 more per month?” or “How long will it take to pay off my loan if I increase payments by 15%?”. The AI simulates outcomes in plain language, helping users experiment without spreadsheets.

4. Fraud Detection Conversations

Instead of generic alerts, the AI engages: “I noticed a purchase in another country. Was this you?”. Immediate natural confirmation reduces fraud handling time.

5. Personalized Investment Guidance

Users can ask: “Show me low-risk options aligned with sustainability”. AI generates explanations, analogies, and tailored suggestions, shifting finance from intimidating to approachable.

6. Wellbeing + Finance Integration

Gen AI bridges lifestyle and finance: “Since you’ve been traveling often, should we increase your travel insurance coverage?”, “Your sleep app shows reduced rest—would you like tips on stress-free money management?”

7. Micro-Moments Banking

AI integrates with daily life events. A message after a taxi ride: “Would you like to round this trip up and add it to your savings?”. Links small behaviors to long-term financial habits.

8. Safe Digital Asset Hub

Users can store documents, receipts, and IDs conversationally: “Store my car insurance policy here.”, “Find the warranty receipt for my laptop.”

9. Financial Literacy Mentor

Instead of FAQs, the AI acts as a coach: “Explain compound interest as if I were 10 years old.”, “Give me the 3 most important things to know before opening a mortgage.”

10. Community-Driven Features

AI facilitates generosity: “Send 5% of my cashback into a community kindness fund.” Creates emotional bonds between customers through shared positive impact.

Experimenting and Exploring: Designing with Science

Designing this conversational system required iterative experimentation, guided by behavioral research:

• Testing: Early prototypes used humans behind the AI curtain to simulate responses, helping to uncover natural phrasing before training models.

• Behavioral Probing: Testers were encouraged to “play” with the app, surfacing unexpected requests (like using the app as a diary for financial goals).

• Error Tolerance Studies: Research showed that users forgive mistakes when the AI admits them transparently, confirming human-like fallibility increases acceptance.

• Trust Calibration: Experiments revealed that too much automation reduces trust—users preferred when AI occasionally handed control back (“Would you like me to confirm this with a human advisor?”).

By combining human-centered design principles with generative AI experimentation, the team pushed beyond functional banking into a human-financial ecosystem.

Key Takeaways

1. Chat is an expanding pattern, not the only one. Conversational interfaces complement—but don’t replace—other digital touchpoints. A hybrid approach offers the best of both worlds.
   
   

2. Generative AI can enrich interactions. From quick transactions to contextual financial coaching, AI chat can reduce friction and create new value.
   
   

3. Experimentation is essential. Prototyping, testing, and exploring conversational flows reveal where chat truly helps users and where it risks confusion.
   
   

4. Trust is non-negotiable. Transparency, empathy, security, and smooth human handovers are vital to make customers feel safe.
   
   

5. The real potential is in experience. Conversational banking isn’t just about speed or cost savings—it’s about offering a new layer of emotional connection that can make financial services more human.

Conversational AI should not be seen as a replacement for existing digital banking, but as a new frontier of interaction. Its strength lies in making banking feel less like navigating software and more like having a meaningful conversation. For banks ready to experiment carefully and design responsibly, AI-powered chat can take financial interactions into uncharted territory—opening the door to experiences that feel intuitive, empathetic, and truly supportive.

Final Word: Conversational Banking as a New Digital Frontier

The emergence of AI-powered chat in digital services design has undeniably reshaped digital interactions. While not every service—or every user—will prefer a chat-first experience, conversational patterns have carved out a significant role in how people engage with technology today. For banking, this represents an opportunity to reimagine future digital interactions beyond forms and menus, making them more intuitive, approachable, and even human.

That said, conversational banking is not a silver bullet. It comes with trade-offs:

• Not all users feel comfortable discussing finances in a chat format.

• Complex tasks may still benefit from structured navigation.

• Regulatory and security requirements demand careful safeguards.

Still, when designed thoughtfully, conversational banking can unlock experiences that traditional apps cannot. It allows banks to meet customers in moments of uncertainty, provide instant clarity, and deliver personalized guidance in a way that feels more like a trusted partner than a digital tool.