Impact of AI-Powered Personalised Marketing on Customer Experience with Australian Banks

Artificial intelligence (AI) has completely transformed how customers interact with and receive service in the banking industry. However, successful adoption of AI-enabled banking services continues to rely on an understanding of what influences the satisfaction of customers. This study uses Commonwealth Bank of Australia (CBA) as a case study to investigate how innovation features affect customers’ experiences with AI-integrated banking services. This study examines the connections between relative advantage, compatibility, complexity, and customer experience with AI-enabled banking by building on Diffusion of Innovation Theory and integrating trust as a important factor which unique to AI contexts. This research was employed a quantitative approach and used the Diffusion of Innovation (DOI) theory as the theoretical framework to study customer adoption and acceptance of AI-powered personalised marketing initiatives. The study population was Commonwealth Bank customers who are in the age group of 29-44 years (Generation Y) in Victoria, representing a key demographic segment for digital banking services. A structured survey was used to collect primary data, and 151 of the responses were considered for analysing. Statistical analysis was conducted using SPSS to examine relationships between only three key constructs from Rogers’ Diffusion of Innovation theory: relative advantage, compatibility and complexity, along with trust as an additional factor and customer experience. The study specifically investigated how these factors influence customer acceptance of AI-powered personalised marketing and their subsequent impact on overall customer experience within the banking context. Results discovered that significant positive relationships between DOI constructs and customer experience. Relative advantage, representing customers perceived benefits of AI-powered personalised marketing over the traditional marketing approaches and its demonstrated a statistically significant positive effect on customer experience. Compatibility, reflecting how well AI marketing aligns with customer’s existing values and banking behaviours, also showed a significant positive impact. However, complexity revealed a significant negative relationship, indicating that customer perception of AI-powered personalised marketing needs to be easy to understand and use. Furthermore, trust identified as a critical factor, with the findings which determining a significant positive effect of trust in AI-powered personalised marketing on customer experience.