How Artificial Intelligence is Driving Fast-Learning Financial Service Providers

By Kevin Flanagan, Director of Marketing

Branch visits are down. Online banking continues to grow.

How can financial institutions prevent attrition and delinquency—and drive more business from existing users—when face-to-face interactions are rare and people are blind to banner ads?

We held a webinar on May 8, 2018, featuring Devon Kinkead, founder and CEO of Micronotes, who shared some of the results achieved by fast-learning financial institutions that are using AI-driven interview marketing to engage with users.

Watch the recording of the webinar and learn how to give online users the personalization they expect by using AI-driven interview marketing:

 

 

To Validate Customer Needs, Don't Guess—Ask (Pt. 2)

Part 1 of this post discussed the importance of validating customer needs, something that broad-based online advertising often fails to do. Part 2 examines how interview marketing validates user needs, enabling financial institutions to engage more effectively and drive additional revenue from existing customers.

By Devon Kinkead, CEO and Founder

Like a recommender engine familiar to customers of Netflix, Amazon and other online retailers, interview marketing classifies customers based on held information (e.g., account information, demographics, credit information) into likely buyers of particular products and services.

Then, once those customers log in or log out of their mobile or online banking system, we ask for confirmation of a life event or need, clarify the exact need, and make the offer. For those who respond in the negative, that information is used to reduce future errors and improve the classifiers. This process generates a mass of validated leads that are sent to the financial institution’s front line—and can be sent to the advertising engine to advertise to a validated need.

Advertising works best when the user need is validated:

  • AdWords works because the search term validates the user need.
  • Recommender engines on password-protected sites work because they operate on explicit user input in the form of past purchases, selections, and/or searches.
  • Micronotes works because users train the system to get exactly what they want by taking a 10-second interview.
  • Advertising systems work better because Micronotes passes validated leads to the ad engine, as well as to the financial institution’s front line for follow-up.

So, if you want better ad performance, stop guessing and start asking.

To Validate Customer Needs, Don’t Guess—Ask!

By Devon Kinkead, CEO and Founder

Ads are most effective when they validate a customer need. For example, Google AdWords works because the search term validates the need. However, ads are ineffective when the prospective customer need is unknown—for example, I don’t have diabetes so I’m unlikely to buy Jardiance, even if the advertising I see is well-executed.

Existing customers have little tolerance for irrelevant advertising. That’s why you see so many recommender engines from Netflix, Amazon and other companies telling you things such as: "Customers who bought this flashlight, also bought these batteries.” Recommender engines leverage known customer preference data to suggest useful products and services. In short, Amazon, Netflix, and other retailers are training customers to expect good recommendations. That’s why it’s important to deliver.

So, the first order of business in advertising is to validate that the customer has a need. Google does this automatically via the search term—e.g., “mortgage rates”—whereas Amazon and Netflix try to guess customer needs based on past purchases. These savvy retailers don’t advertise without user input on preferences. Do you see Google advertising products on their home page? No, you only see the search box.

So, how do you validate needs for financial services—which are largely driven by major life events—in the absence of search, selection or purchase histories? That’s where Micronotes comes in. We do it by asking good questions. More on that in part 2 of this post.

Out-Learning and Out-Servicing Your Competition

By Kevin Flanagan, Director of Marketing

There was a time when banks and credit unions could ask customers who were visiting a branch if they were interested in additional products or services. However, the explosive growth of digital banking has largely eliminated that opportunity.

But rather than guess what customers and members want, why not ask them while they use online banking? That's how interview marketing works.

We held a webinar on April 25, 2018, featuring Devon Kinkead, founder and CEO of Micronotes, who discussed how banks and credit unions are using AI-driven interview marketing to engage with online users. The presentation examined how this new way of engaging with online users is helping financial institutions reduce attrition and generate more business.

View the webinar recording:

Want to Know What Your Customers Want? Just Ask (Pt. 3)

This is the third of a three-part series discussing how financial institutions can drive revenue growth by engaging with online users more effectively. Part 1 examined how an AI-powered marketing system is valuable for engaging with users who prefer to do their banking online. Part 2 looked at ways to improve customer satisfaction. The final installment discusses how to work smarter to acquire new accounts.

By Devon Kinkead, CEO and Founder

Always remember that online and mobile banking are service channels where consumers manage important financial business. Don't turn those service channels into billboards.

Irrelevant or poorly timed advertising may degrade the experience or drive consumers to find another financial institution to meet their needs.

Work Smarter to Acquire New Accounts
Financial institutions sometimes spread their marketing dollars pretty thin trying to attract new accounts. How can organizations focus on acquisition while saving on related spending?

Leverage brand promoters. One of the best ways to acquire new accounts is through word of mouth. Brand ambassadors – those who give a nine or 10 out of 10 when asked how likely they are to refer your institution to a friend, family member or colleague – are the most likely to make those referrals. Identify your brand ambassadors, ask them for a referral and reward them well when the referral comes through.

Focus on what works. Ask your new accountholders how they found you: Referral? Internet search? Drove past a branch? Set up targeted interviews for new customers or members when they log in or out of digital channels. Once you know what has succeeded, you'll have a good idea where to point your acquisition dollars in the future.

Effective digital marketing is about delivering the right content to the right person in the right context—and at the right time. Financial institutions can speculate about consumer needs, or they can use AI-powered systems to learn about personal preferences to serve people better. In this brave new digital world, financial institutions that leverage technology to outlearn and outservice the competition position themselves on top.

Want to Know What Your Customers Want? Just Ask (Pt. 2)

This is the second of a three-part series discussing how financial institutions can drive revenue growth by engaging with online users more effectively. Part 1 examined how an AI-powered marketing system is valuable for engaging with users who prefer to do their banking online. Part 2 looks at ways to improve customer satisfaction.

By Devon Kinkead, CEO and Founder 

Where do you stand with your accountholders? You can't keep or deepen relationships with consumers who won't recommend your institution. If your satisfaction and referral scores are comparatively low, you'll need to address any major issues that surface before launching a big cross-sell campaign. You need to benchmark your base. Benchmarking data, including the Net Promoter® Score, provides a framework to strategically focus on top growth opportunities and challenges.

Understand consumers' needs and objections. For example, if you want to know about upcoming major life events or why an accountholder doesn't use more digital services, stop guessing and start asking. Quick micro interviews can help you quickly learn more about consumers. When they log in to mobile or online banking, a marketing platform with machine learning functionality can identify whether they qualify for a two- to three-question interview that identifies potential objections and leads to a tailored offer. Response data, both positive and negative, is generated from the 20 percent of a financial institution's digital base who typically interview monthly and used to train the machine learning systems to ask better questions the next time.

Avoid the creep factor. A financial institution knows a lot about its accountholders, including spending habits, account balances and transaction data. If you blatantly use that data for sales—even if it's correctly targeted—you can erode consumer trust. For example, if a consumer who has just aggregated a Chase credit card account with your personal financial management system suddenly sees a credit card balance transfer offer promoting rates "lower than Chase," the offer can feel intrusive. However, when consumers volunteer answers to increasingly intelligent and relevant questions about their financial needs in a quick digital interview, the interaction feels authentic and relevant offers may be more welcome.

Part 3 discusses how to work smarter to acquire new accounts.

Want to Know What Your Customers Need? Just Ask

This is the first of a three-part series discussing how financial institutions can drive revenue growth by engaging with online users more effectively.

By Devon Kinkead, CEO and Founder 

As digital banking has matured, consumer behavior has shifted substantially. People now interact with their financial institutions through digital channels far more than through any other touchpoint. As the way people come to their bank or credit union evolves, how financial institutions market to their accountholders must also change—or they risk losing touch with what consumers want.

The answer is not to double down on old-school "spray and pray" marketing that's neither targeted nor actionable. Impersonal promotions can degrade the service channel experience. A better strategy is to use an artificial intelligence (AI)-powered platform that combines stored accountholder data with individual needs and preferences gleaned from short interviews in digital channels. As these platforms utilize machine learning to gain insight from stored data and quick digital conversations, they become smarter and more effective over time.

Once an AI-powered marketing system is in place, your organization can develop clear strategies for deepening existing relationships and expanding your customer or member base.

Hold on to Existing Relationships
Before focusing on account acquisition, financial institutions should ensure they're doing their best to retain existing relationships. How does that happen?

Part 2 delves into understanding users needs and objections.

Part 3 discusses how to work smarter to acquire new accounts.

Don't Fear Tech, Make it Work for Your Bank (Part 2)

Part 1 of this post discussed why community banks shouldn't be worried that technology is going to put them out of business. Part 2 describes how smaller banks can leverage their community to engage with customers.

By Parker Steed, Client Success Manager

Play to your Strengths

Technology isn’t everything. As a small institution, you know your online banking users better than any megabank. Your users need to know you care about them. So talk to them. Implement their ideas. Focus on building a community they can’t find elsewhere.

Business Insider says that to put up a fight in the space you need to “make customer service the linchpin of [your] business models.”

A financial services institution in Vermont has been seeing interesting patterns in its branch activity. Some of the branches have almost entirely converted to digital channels, while others still use the local branch as a place to grab coffee and connect with neighbors. This institution is hosting and sponsoring events near these active branches and seeing monumental growth. 

People Matter

Staying current and leveraging your strengths is critical to your survival. But don’t neglect the people you are in business to serve. Get out and talk to your users and take their input seriously. If you have a community, then work hard to understand and strengthen it. If you don’t have a community, then get building.

Don't Fear Tech, Make it Work for Your Bank

By Parker Steed, Client Success Manager

Are you worried that technology is going to put your community bank out of business? Don’t be.

While tech giants are trying to steal your business by “combining digital technology with advanced analytics to provide easy-to-use app[s]…customers still trust their primary provider,” according to Jim Marous of the Financial Brand. The question is, what are YOU doing to fight back? And what tools are at your disposal?

Stay Current with Tech
“Artificial Intelligence (AI) is emerging as the savior” of banks and credit unions in this fintech grapple, wrote Mohit Joshi in Finextra. Furthermore, “56 percent of financial services respondents said they were using AI in the past one to three years” according to a recent global AI study.

Just because you don’t have a billion-dollar marketing budget like Bank of America, you can still have the same technology. As a small institution you have access to resources such as Fiserv and FIS. You can enjoy the same technology as the giants, but you don’t have to build it yourself AND you can pay a lot less for it. So, if your bank is still living in the 90’s go upgrade!

(Part two of this post will look at how to make smart decisions about technology and the key role played by people.)

A Marketing Core Processing System

A Marketing Core Processing System

Banking providers think long and hard about their core processing system because, it’s the basis of their business. However, it’s not a differentiator in the marketplace because, every retail banking provider has a functional core processing system. As branches empty, and the basis of competitive differentiation shifts to the digital channels, banking providers need to think about a marketing core processing system that will differentiate them in an increasingly digital banking environment. But, what would a world-class marketing core processing system look like?

Deepen Relationships or It’s Game Over

Deepen Relationships or It’s Game Over

The number of banks and credit unions is shrinking as virtual banking moves customers from local branches to phones, tablets, and PCs.  This shift favors retail banking providers that can deepen customer relationships quickly through the high traffic digital channels, where customers/members increasingly choose to bank.  Why does this shift favor excellence in engagement and cross-selling? 

Leveraging Your Data to Engage the Digital Financial Institution Member

As branches empty and digital banking traffic expands, new engagement strategies are needed to help financial institutions uncover and serve individual member needs. The stakes couldn’t be higher as consolidation sweeps through the industry and fintech providers target financial institution members with unique and personalized experiences. Learn how technology is solving the digital engagement and personalization problem for retail financial service providers.