The migration to online and mobile has created a conundrum for banks.

They have worked hard to sell the convenience of digital channels to the point that they now find themselves in reactive mode — they are waiting for customers to need something.

The 20 startups selected for this year's FinTech Forward Companies to Watch are helping banks replicate, and in some cases enhance, the close bonds they often share with their customers in person through digital channels.

The companies are redefining personal banking and personal security. They're using artificial intelligence to offer virtual assistance. And, through application programming interfaces, they are giving customers a complete picture of their finances so they have more control of them.

Artificial Intelligence 

Customer satisfaction depends largely on banks' ability to meet their expectations and maintain relationships with them. Thanks to tech giants like Facebook, Google and Apple, smartphone users are trained to seek virtual assistance; they routinely pull down a notification tab to view emails, reminders and other information.

People expect the same ease of interacting with their banks. Enter artificial intelligence. Companies like Kasisto are offering conversational AI platforms that allow banks to connect with their customers through messaging apps. Personetics uses AI-powered predictive analytics to anticipate customer needs and provide insight and financial management advice. North Side offers personalized virtual bankers, with its natural-language understanding and dialogue technology, allowing consumers to speak with their banks.

The goal isn't to replace human beings. Good machine learning platforms "have software mimic the humans and humans manage the software," said David Weiss, a senior analyst at Aite Group.

Financial Management 

Several companies provide financial health and activity trackers to help customers assume greater control over their financial lives. InSpirAVE helps people save for big-ticket purchases through goal setting and by bringing in family and friends to help achieve those goals.

A company called Self Lender targets consumers with thin credit files looking to build their credit. Self Lender effectively lets users lend money to themselves to build credit. Its "credit builder account" is a loan secured by a certificate of deposit that is funded by the company's bank partner, Austin Capital Bank in Texas. Customers pay their loan monthly and at end of the term get the money in the CD.

Meanwhile, Private Wealth Systems is bringing wealthy individuals — who traditionally are high-touch customers — into the digital world through account aggregation and other services.

Moven, one of the best-known fintech startups, has had a breakthrough year as its partnership with TD Bank in Canada has led customers to rave about the instant insights they are getting into their spending.

Aggregating customers' financial picture not only helps them understand where they stand and how they should make financial plans, but it also helps banks understand which customers they are vulnerable to losing to competitors, said Mark Schwanhausser, director of omnichannel financial services at Javelin Strategy & Research. None of this works without good access to data. How banks and fintechs gather and mine data and deliver it back to the customer will be crucial to the future of fintech, he said.

Lending and Payments

The loan application process is another part of banking that consumers have come to expect to be on-demand. Fintech has taken notice. Startups have sought to automate and simplify that process. CUneXus Solutions uses data analysis to grant customers quick responses.

Built, an online banking startup for construction loans, aims to streamline the construction lending process by creating a marketplace that connects lenders, borrowers, builders and inspectors.

The need for better solutions is, perhaps not surprisingly, similar in payments.

Many of the companies to watch are tackling payments, to make them either faster or safer. Identitii is using blockchain technology to help banks with old systems remain compliant with new regulations and new innovation. Autobooks, ClickSWITCH, Currencycloud and SupiPay are working to provide faster and more flexible payment services to consumer and business customers.

Yantra, a Kansas-based startup founded by CBW Bank CEO Suresh Ramamurthi, has more than 500 APIs to process contextual and conditional payments in real time, across multiple channels. It partnered with CBW on its proprietary digital banking framework and helped it reduce the payment delivery time from three days to one minute.

Security and Identity

As digital payment solutions proliferate, so do reports of transaction and identity fraud. Lenddo and BehavioSec are learning about their customers by taking in nontraditional data. Lenddo is using social media activity, browsing behavior, geolocation and other smartphone data. BehavioSec is making customer behavior its own layer of security, learning and registering how users interact with their devices, including how hard they press on buttons.

Omnichannel

Alkami Technology and Malauzai are both providing omnichannel banking solutions for community banks and credit unions; their products allow customers to start tasks in one channel and finish them in another.

BookingBug, a digital appointment-booking platform, enables banks to integrate in-branch, telephone and in-person appointments into their digital-transformation strategies.

Banks have lagged other retail sectors for a long time in terms of leveraging digital to sell products and services. For years they made it about lowering transaction costs and customer onboarding, said Bob Meara, a senior analyst in Celent's banking group.

"Banks didn't have a good understanding of the user journey, and said, 'Most customers that start online finish online, so we're doing fine. We just need to protect the user experience.' I disagree wholeheartedly," he said. "The idea is to make it easy for customers to engage however they want to, and let them connect to a call center without authentication burden."