If the past 10 years of mobile banking has been a race to add more features, Frost Bank’s Jimmy Stead expects the next decade could lead to greater simplicity in banking apps, thanks to artificial intelligence. 

“The end result of focusing on features for 10 years: A lot of apps have become a lot more complicated to use. There’s so much in there,” said Stead, Frost’s chief consumer banking and technology officer. 

Looking out “on the next couple horizons,” Stead expects a shift from that mindset to “making these apps smarter, and better, and more customized. And it’s really AI that is going to allow you to do that in a meaningful way.” 

The San Antonio-based lender, which has about $51 billion in assets, debuted its mobile banking app 10 years ago. Since then, the bank has endeavored to keep the app simple and intuitive for its customers. “I think that’s helped us over the years,” said Stead, who was part of the team that brought online banking to Frost and created its mobile app.

All industries are talking about or pursuing AI as an efficiency tool, yet “the thing that's less talked about is just how impactful it can be on the customer and helping them,” Stead said. 

In mobile banking apps today, “if you need to get something done, you’ve got to follow a really defined path that that company has defined for you,” he said. “But we’re entering a time where you can really, in your own words, tell the app what you need to do, and it’ll walk you through that. It’s more on your terms.”

Personalization and customization in mobile banking apps will become more meaningful with AI tooling in place, Stead predicted, although it’s likely to take some time before becoming widespread in the industry. 

Broadly, banking is expected to be significantly affected by generative AI. AI is only just beginning to change mobile banking, consulting firm Forrester said late last year, as top banks are expected to begin using AI to anticipate customer needs and provide personalized guidance. 

Some bank customers have reservations around AI use in their financial lives, but those in the industry with an eye on banking innovation are closely watching agentic AI technology, in which AI systems act independently and perform tasks autonomously without human oversight or guidance. In time, that’s expected to shift the digital banking mindset, from “do it yourself” to “do it for me.” 

Frost, for its part, is exploring AI use in different areas of the company, but remains particularly cautious about its use in customer assistance, Stead said.

“We’ve absolutely avoided fronting conversations with a customer using a bot. It’s something that I don’t think that we’ll ever do,” he said. 

The bank is using AI, however, to aid employees in assisting bank customers more quickly and efficiently, by giving them more knowledge at their fingertips. “It’s not a substitute, it’s not in the middle of our conversations with customers,” Stead added.

For Frost, it’s about “shrinking the barrier for a customer to interact with us,” he said. 

The first version of the bank’s app featured a customer service call button on the log-in page “and every page thereafter,” to make it easy for customers to reach an employee, he said. It’s evolved from there: Customers who now log into Frost’s mobile app pass their authentication along, so customer service staffers are immediately aware of who they’re talking to and customers don’t have to jump more hoops, he said.

Staying in touch with customers has provided Frost with key opportunities to improve, too. Frost builds its own digital banking software in-house – something that Stead said sets the lender apart from its peers, most of whom rely on large vendors – so when customers complained about a navigation change Frost made to its app, the bank was able to design an improvement within a few hours of receiving those complaints, and implement a fix within three days. 

For the bank’s digital employees, “the expectation is, they’re talking to customers,” he said.

On the brick-and-mortar front, Frost has been expanding its branch network in large, fast-growing markets such as Austin, Dallas and Houston in recent years. Stead contends the Texas lender has a headstart compared to the likes of PNC and Huntington, which have more recently announced plans to increase branch presence in those markets.  

“Obviously, we don’t have the purse strings of the really big banks,” he said. But “we’re really close to our customers, and we know what drives them and what they need, and can respond really quickly to that.”