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AI Can Supercharge Channel Performance and Increase Financial Services Customer Engagement

By Raviteja Dodda

The global pandemic is driving consumers to spend more time on banking websites and mobile finance apps. This is great news for financial services marketers, but it’s essential to understand that the job is far from over once a customer downloads an app or opens an investment account. While customer acquisition tops the priority list for many financial services marketers, the actual test is whether they can build loyalty, keep new customers engaged, and achieve customer growth.

Today’s banking consumer receives more marketing messages than ever before from a multitude of channels. But with each digital touchpoint comes a new challenge: managing all of the data that comes with every customer interaction and using it to predict what customers will want next.

Industry analyst Forrester offered this prediction for 2021: “Top companies will cultivate resiliency, creativity, customer-obsession, and adaptability.”

We couldn’t agree more. Luckily, advances in artificial intelligence (AI) can help financial services organizations do just that.

New Expectations

Connected consumers come with their own increased set of expectations. Familiar with data collection practices, today’s younger banking customer expects high levels of personalisation.  Millennial and Gen Z customers expect frequent, consistent, and targeted communication. They’re quickly irritated by repetitive, generic, and irrelevant content.

Unlike their more conservative counterparts, Baby Boomers and GenX, Millennials engage in value-based spending, seeking out companies they feel have their best interests (and those of the world around them) in mind. These customers don’t follow the chronological financial timeline of previous generations, with many delaying major financial decisions to accommodate an individual timetable of life events, career changes, and personal interests. It’s up to the financial services company to incentivize saving and investing.

These fundamental differences present a challenge to predicting what customers want and when. Fortunately, AI removes the guesswork through analytics and data-led insights, allowing organisations to pinpoint critical moments in a customer’s journey and respond accordingly.

Personalisation is Essential to Customer Engagement

In the past, banks could offer a 1:1 experience to their customers. A customer could walk into their local branch, and a designated officer could recommend the right products and build a personal relationship. The biggest challenge for banks is to replicate this experience on the digital side. As touchless banking transactions become the norm and financial app usage increases, personalisation becomes even more crucial.

Fortunately, AI now can process vast amounts of information quickly and offer detailed insights and customer behaviour predictions. This capability allows marketers at banks to create highly customized online experiences. Real-time customer data and actionable suggestions can help banks deliver a better customer experience across all engagement channels.

AI builds a holistic profile of the target financial services customer, increasing the likelihood of reaching them with the right message at the right time. A complete picture of the customer experience helps marketers align strategies and financial product offerings. These offerings range from a new business line of credit to a young entrepreneur to enhancing credit card rewards programs for long-term customers and everything in between. It’s about more than predicting upcoming financial milestones. With the power of Ai supporting your customer campaigns, marketers at banks can easily see a customer’s entire lifecycle. That larger picture considers all the products they use, past customer service interactions, any problems they’ve had in the past, and their resolutions.

Personalisation creates a strong bond between the bank and the customer. It’s more than simply using the right channel to convey a targeted message. The message itself must be valuable and timely to the customer’s life events across a multitude of channels. It should be a bespoke offering that tells the customer you understand them. Offering customized products and predicting customer needs are only a portion of what AI can do. Detailed insights help banks refine their mobile offerings to increase customer engagement and retention. Even a hint of friction within an app can lead to consumers downloading a competitive product. Quickly identify problem areas and streamline features to meet your customer’s changing needs while reducing attrition rates.

 With this level of customer knowledge, banking becomes an authentic, one-on-one experience for each customer. Think of AI-powered personalisation in three key pillars from the banking customer’s viewpoint: onboarding, retention, and growth.

Improving the Onboarding Experience with AI

Onboarding a new banking customer sets the stage for the relationship, and financial services organizations only get one chance to do it correctly. Everyone in financial services is well aware of Know Your Customer (KYC) regulations and the mandatory process of identifying and verifying the customer’s identity when opening an account and periodically over time. In the past, this process could be clunky and repetitive, turning off new customers who felt they had to jump through too many hoops to activate a new account.

Enhancements to security and AI solutions make it easy for consumers to open new accounts and perform a variety of transactions that previously required a branch visit.  AI can help make this effortless for new customers in a number of ways. For example, authenticating and verifying identification or providing on-demand self-help options during the application process can reduce drop-offs by prompting customers to return to incomplete applications or reminding them to upload required documents. Using predictive technology, marketers can even set up automated reminders for customers who have downloaded a mobile app to keep them engaged. These reminders can be sent via email, SMS, or push notification to drive them back to the mobile banking app or website with relevant offers.

For example, CoinDCX, India’s largest cryptocurrency exchange and liquidity aggregator, has been investing significantly in customer safety and user education as a growing number of new, digital-first customers take time to understand things like automated KYC.

Please Stick Around: AI-powered Retention

Bolstered by customer data and predictive analytics, financial marketers can remove the guesswork from campaigns and deliver relevant offers that build loyalty. For example, target customers that have shown a pre-holiday spending spike with new credit offers, cashback and rewards programs, payment plans, and other incentives. Add value for new homeowners and create bespoke offers for insurance, home equity lines of credit, renovation loans, and other products at the appropriate intervals.

With a 360-degree view of your customer, financial marketers can use AI to automatically segment customers into desired categories, such as loyal, promising, at-risk, and more. Use AI-led insights to identify customers’ preferences in each segment and which are most likely to respond to specific promotions.

Financial companies that are digital-first have cornered the market on this ability. Community and challenger banks add real value and connect with younger customers at a deeper level by offering differentiated services. These services include paying account holders a day or two earlier when they use direct deposit, which is certainly appreciated by customers who are living paycheck-to-paycheck. Community banks such as CapWay, First Boulevard, OneUnited Bank, and Urban One focus on the Black and African American community. The surge in popularity of digital banking platforms like Daylight, which serves the LGBTQ community, and Oxygen, focused on helping freelancers, further underlines the demand for these online-only banks. By the nature of the demographic they serve, these companies will take a very different approach to customer engagement than traditional banks.

For example, Current, a fast-growing digital banking start-up, wanted to reach younger, more diverse banking customers who care deeply about social justice. To engage with this demographic, the marketing team created a series of videos targeting unbanked consumers. The theme of the video series was “The Hustle,” and it showcased inspirational entrepreneurs, content creators, photographers, and visual artists from the Black community. The campaign was successful because Current understood their core audience and crafted messages to uplift and educate them with their present life stage in mind. New customers felt valued and understood. Existing customers felt seen, as well.

Growth: Leveraging Loyal Customers 

Growth is the only option for financial services companies. Your business will eventually cease to exist without selling new products to existing customers and attracting new customers. Existing, happy customers are one of your most significant resources. Personalisation will help increase payment card usage, grow deposits, and encourage customers to turn to your business for loans. With AI, you can tailor communications based on your customers’ transactions, preferences, demographics, and location filters.

Delighting your existing customers also goes a long way towards attracting new ones. You want your customers to become your promoters. Keeping them satisfied will turn them into brand evangelists who bring in new customers because they trust your company and have had a good experience with it. Happy banking customers want to share their joy with their friends, family, and colleagues. To create a successful referral program, you need to understand each customer’s how, where, when, and why. What behaviours do your loyal customers demonstrate? How are these behaviours different from other customer groups? Unlocking this is the key to future growth and revenue.

The Right Message, Channel, and Time

Data-led insights fed by AI can provide the framework for building successful campaigns that reach customers at the optimal moment with precisely the information they want or need. Moments-based marketing connects financial brands with consumers, following that customer’s unique economic timeline. Targeted communications based on consumer life events offer significantly more value than demographics-based campaigns. It’s about so much more than basic digital communications with your customer, such as account updates and alerts. It’s about weaving yourself into your customers’ lives using personalized service communications and contextual product recommendations – across the web, mobile, and email.

End Missed Opportunities

Our research tells us that the number-one frustration of customers is receiving irrelevant communication, such as offers to join a program of which they are already a member. Inconsistent or irrelevant offerings represent missed opportunities to create meaningful interactions that provide value and increase customer loyalty. Instead of a one-size-fits-all campaign, maximise ROI by making use of every occasion to enhance customer happiness. For example, artfully tempt newlyweds with outstanding mortgage rates, educate new parents on innovative investment products for the future, and get students started right with easy-to-manage credit programs.

AI-led customer engagement platforms offer unprecedented adaptability, eliminating the need for time-consuming testing of variations and time windows. AI can even help financial marketers adjust the send time of messages in real-time, driving more action from your target customers.

Whether the message is to inform, educate, guide, or simplify, always create campaigns with the banking customer’s needs in mind. All of the technology and tools are at your disposal; the key is to use them the right way and devise a strategy. The ease of use and availability of AI technology has made it easy for organisations to learn consumer expectations and deliver seamless, multichannel communications at each moment of the financial services customer’s lifecycle.

About the author

Raviteja “Ravi” Dodda is the co-founder and CEO of MoEngage, an insights-driven customer engagement platform. Ravi has more than ten years of experience in leading global teams and managing successful technology products. Prior to MoEngage, he co-founded and built DelightCircle, a local-offers mobile app. Ravi has been recognized in the BW Disrupt 40 Under 40 and Forbes 30 under 30 lists.

Global Banking & Finance Review


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