Personalised Journeys vs Programmed Filters: The real test of AI in finance

Across India's rapidly digitising landscape, the surge in digital finance is not just a question of convenience; it’s also about expectation. Millions of users now sign into their banking, lending, and investment apps expecting something far beyond a standardised experience. They want journeys that are smart, personalised, and feel uniquely attuned to their lives.

But beneath the surface, behind every loan approval or spending suggestion, sophisticated AI systems are wrestling with an inherent contradiction: the promise of personalisation versus the demands of regulatory and risk-based logic.

Rules can’t capture the real world, but context matters more than ever

Conventional lending systems have always played it safe. Need a loan? The checklist is familiar: stable monthly income, formal employment, and a healthy credit score. These filters reduce risk but exclude millions like self-employed vendors, gig workers, and informal earners—people who often demonstrate financial responsibility but lack the paperwork to prove it. This rigid system does not fit the context of India’s diverse workforce.

That tide is slowly turning. New behavioural AI models dig deeper, mapping how users spend, save, and repay. These systems spot trustworthy borrowing patterns in unconventional data streams, making finance more accessible without abandoning the guardrails of risk management.

Younger generations demand journeys that just 'get' them

For Gen Z and younger millennials, everything from music playlists to shopping carts adapts in real time to their likes, dislikes, and routines. Finance apps that don’t 'get' them, offering generic or random suggestions, simply lose trust and users. It’s not enough to show a shiny interface; people want actionable recommendations that reflect their needs and life stage.

According to an EY study, 83% of Gen Z prefer digital-first financial services. They lead India’s unprecedented wave of digital payments, according to government statistics on transaction growth. For them, personalisation is a sign of legitimacy. But relevance without clarity is a recipe for confusion or poor choices. Today’s leading apps ensure every tailored recommendation is delivered with context, fostering both exploration and user confidence.

What you don’t see: Logic filters behind every decision

No matter how intuitive an app feels, approvals still depend on algorithmic logic. These invisible filters comb through repayment histories, income irregularities, and transaction anomalies before green-lighting products. Often, when users hit a wall, like a denied credit line, they are left guessing why. The disconnect between a friendly front-end and a silent decision engine erodes trust.

A few forward-thinking platforms are tackling this transparency gap with explainable AI. These models don’t just make decisions; they justify them in plain language, so users understand not just the outcome but the reasoning as well.

Alternative data: Unlocking credit for the unconventional consumer

Rigid credit scores are becoming only one piece of the puzzle. Today’s inclusive fintech firms weigh non-traditional data: UPI payment histories, regular mobile recharges, utility bill habits, and even wallet top-ups. Users without a formal credit score but who demonstrate healthy digital financial habits now find doors opening where none existed. The key is responsible analysis—using these signals to welcome the excluded, not to exploit or misjudge them.

The road ahead: Intelligent journeys anchored in accountability

As digital finance evolves, one truth stands out: platforms must design for both individuality and integrity. It’s not enough to push users down a personalized path; they need to know that behind every prompt or offer, there’s fair, comprehensible reasoning.

The next generation of India’s financial leaders will set themselves apart by building journeys that inform and reassure as much as they personalise. Emotional resonance and algorithmic logic are not at odds. When wielded together, they promise a financial ecosystem where millions feel understood, empowered, and secure.

The author is AVP - Brand Marketing, Olyv, a personal loan provider.