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Why AI is the missing translator in banking customer communications

Authors

  • Raja Bose

    Managing Director, Banking and Capital Markets, Business Transformation Consulting, Ernst & Young LLP

  • William Coe

    Senior Manager, Banking & Capital Markets, Business Transformation Consulting, Ernst & Young LLP

  • Beatriz Sigala

    Manager, Banking and Capital Markets, Business Transformation Consulting, Ernst & Young LLP

07 minute read 12 Jun 2026

The true cost of poor banking customer communications is loyalty. 

In brief
  • Banking communications have turned into a compliance exercise that is eroding customer trust.
  • Generative and agentic AI can simplify banking communications by generating compliant, customer-friendly letters while reducing cost, effort and time.
  • By approaching customer correspondence as a strategic asset rather than an obligation, banks can turn a chronic pain point into a competitive advantage.

Customer letters are one of the few direct touchpoints between banks and their customers. Yet these communications are often written without the customer in mind.

What should be clear, straightforward messages — about claims decisions, regulatory disclosures, payment reminders or changes in terms — are instead couched in impersonal, opaque language designed more for internal processes and regulatory compliance. As the Consumer Financial Protection Bureau highlighted in its annual report, many letters use “boilerplate language that on the surface gives the appearance of a response but in reality does not seem to convey any actual information to the consumer.”¹

The impact? Confused and angry customers driving up call volumes, escalations and complaints, increasing both operating costs and regulatory exposure.

Customer experience matters in banking

According to EY NextWave Consumer Financial Services research, today’s consumers have four to five financial relationships, which means banks cannot take customer loyalty for granted. The EY survey also found that 41% of consumers somewhat or very seriously considered changing their primary bank relationship in the past 12 months. Across industries, consumer research shows customers will go out of their way for better service:

  • Sixty-four percent of consumers say they will move their business to another company based on poor customer service, even if they like the product.²
  • Companies that deliver high-quality customer experiences retain 89% of their customers compared to 4% for companies that rate poorly.³
  • Eighty-one percent of consumers report a preference for companies that offer personalized experiences.⁴

Despite the evidence that attentive customer service matters, customer letters remain one of the least modernized aspects of banking. The consequences are costly, both from a loyalty and a financial standpoint.

How EY can help

An EY analysis at a large bank captured the operational burden of today’s letter environments, where an extensive template inventory, evolving ownership models and legacy technology can create friction when making even minor changes. At the core, banks face a metrics-based trade‑off: simplifying templates can reduce operational and mailing costs at the expense of customer satisfaction; increasing personalization can lift engagement and retention but typically increases complexity and cost. Cost containment efforts tend to strip out relevance, while customer-level specificity accelerates template sprawl and operational overhead.

 

Limited digital capabilities exacerbate the challenge, leaving many banks dependent on paper communications and locked into millions of dollars in mailing costs. AI offers a way to break this dynamic, allowing banks to scale specificity and modernize the customer experience while controlling cost.

 

When applied thoughtfully, generative and agentic AI present a powerful opportunity to bridge the gap between customer expectations and current correspondence capabilities. These technologies allow banks to redesign customer communications from the ground up — simplifying content, improving consistency, accelerating updates and strengthening compliance controls. More importantly, they transform customer communications from an expensive, reactive task into a proactive process that builds trust and creates significant cost savings.

Annual cost savings
20%–40%
20%–40%
Projected amount that large banks can save by automating high-volume correspondence

Source: EY financial modeling 

Banking customer communications: why modernization is essential and challenging

At first glance, the solution seems simple: Write customer correspondence in plain language. But the reality is far more complex. Banks struggle to improve customer communications because their systems and operating models were never built for scale, speed or customer clarity.

Correspondence operations are highly fragmented across multiple legacy platforms, teams and business lines, with frequent handoffs between operations, legal, compliance and frontline groups. These environments are typically rules-based and labor-intensive. Users frequently resort to manual drafting to create personalized or scenario-specific letters, risking errors. A single letter may pass through more than 10 systems and dozens of handoffs, each step adding cost, cycle time and the risk of mistakes.

This fragmentation causes duplication and inconsistencies. Each system and business line manages its own templates, logic and variables, leading to sprawling correspondence libraries. Customers often receive multiple, overlapping notices in different tones and formats. Instead of clarity, they experience volume.

Digital capabilities lag behind customer expectations. Despite growing demand for digital delivery and self-service, many communications remain paper-based, driving up print and postage costs, slowing delivery and limiting timely updates.

Regulatory and governance pressures further compound the problem. Customer communications are subject to strict, mandated verbiage, jurisdiction‑specific requirements and regulatory service level agreements across products and customer scenarios. Yet reporting and auditability remain incomplete, increasing risk.

Historically, banks have addressed these issues with incremental fixes, including new templates, refreshed style guides and enhancements to customer communication management platforms. While these efforts may deliver short-term relief, they fail to address the root cause: legacy technology paired with operating models that have fixed, inflexible rules built into them, which add complexity every time a new scenario or regulatory change arises.

Before banks can unlock more advanced AI-enabled communications, they need a strong foundation. A focused review of the current environment — and a clear plan to fix gaps — can help make sure content, data and controls are accurate, consistent and scalable. In many cases, this groundwork is what makes modernization possible and helps banks move from fragmented processes to an AI-ready, regulator-confident baseline.

How conversational and agentic AI streamline banking communications

GenAI and agentic AI allow banks to rethink how customer letters are created, governed and delivered. Instead of relying on static templates and rigid rules, AI can dynamically generate letters using approved language, built-in regulatory guardrails and relevant customer context.

To take full advantage of AI-powered communications, banks must first establish a strong foundation. This starts with a comprehensive assessment of the current communication landscape — reviewing and organizing templates, strengthening content governance, redesigning workflows, and embedding regulatory controls up front. Leading institutions are moving toward systems where GenAI and other AI tools handle everything from creating and checking letters to personalizing and tracking them. By using this layered approach, banks can cut down on manual work, keep messaging consistent and compliant, and use feedback to keep improving — making it possible to update correspondence without adding extra complexity or risk.

Central to this approach is an AI-powered “letter factory” composed of specialized AI agents that work across the full customer communication lifecycle:


Large‑bank correspondence systems show a common constraint: Current setups make letter changes slow, rigid and difficult to scale. Even modest updates often require extensive coordination, testing and revisions, limiting a bank’s ability to respond quickly to regulatory, business or customer needs. AI agents could significantly compress this time frame. For example, in the pharmaceutical industry, one company used an AI tool to generate a comprehensive clinical study report in just 10 minutes, a process that normally takes 12 to 15 weeks.⁵

EY financial modeling shows that automating high-volume correspondence — such as disputes and claims letters — at large banks could reduce annual costs by 20% to 40%, even before accounting for improvements in customer retention, trust and cross‑selling.

How AI turns banking communications into a strategic advantage

As banking products and pricing become increasingly commoditized, communication is emerging as a key differentiator. Customer letters are more than operational necessities. Done well, they can strengthen customer relationships, reduce operational and regulatory risks, and deliver measurable financial returns. By adopting GenAI and agent-based operating models, banks can move customer communications from a cost center into the strategic core of the enterprise.

The future of customer communications is not incremental automation. Banks that embrace intelligent, well-governed and customer-centric communications will earn trust and gain competitive advantage with every interaction.


Summary 

Customer letters are one of the most direct — and most overlooked — ways banks interact with customers. Yet most banking customer communications remain dense and impersonal, creating confusion, complaints and regulatory risk. Fragmented legacy systems and decentralized operating models make modernization difficult. By leveraging generative and agentic AI, banks can transform customer communications from a costly obligation into a strategic asset — simplifying content, accelerating change, strengthening compliance and improving customer trust while delivering significant cost savings.

About this article

Authors

  • Raja Bose
    Managing Director, Banking and Capital Markets, Business Transformation Consulting, Ernst & Young LLP
  • William Coe
    Senior Manager, Banking & Capital Markets, Business Transformation Consulting, Ernst & Young LLP
  • Beatriz Sigala
    Manager, Banking and Capital Markets, Business Transformation Consulting, Ernst & Young LLP
Related topics
Banking & Capital Markets
Banking transformation
Financial services

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