The Rise of Digital Solutions in the Banking Industry: Is Your Bank Positioned Well in Our New World?

In a world dominated by the global pandemic, consumers and businesses have turned to contactless solutions and have minimized the need to conduct business in person, even as we slowly return to “normal”. These solutions have given rise to a swift increase in digital transactions as technology has enabled many financial activities to be conducted on a laptop, tablet, or mobile phone app.

The increase in digital transactions includes bill payments, P2P transactions, money movement, investment transactions, and even gambling and sending money overseas.

Another aspect of the global pandemic has been the need for financial institutions to “be there” for their business and consumer customers.  As banks and credit unions position their products and services to “be there” for their customers, this has given rise to a need for a deeper understanding of their customers’ lives and financial situation in order to provide the best possible service while at the same time maintaining profitability.

How will your Bank or Credit Union compete successfully in this New World?

One asset that is unique to your financial institution is your bank’s data, specifically the unique transactions that your customers conduct.  While the general activities and behaviors of your customers may be like other bank and credit union customers, the quality and quantity of their digital behavior becomes more unique.  Understanding what makes your customers unique is an opportunity for your institution to offer a personalized mix of financial solutions tailored to meet their needs.  This will lead to deeper engagement with your customers and your ability to maintain profitability. 

Insight Financial Marketing provides an industry-leading solution to help your bank or credit union deepen relationships with your customers even while the world is quickly changing around us.  Our innovative technology provides near real-time customer intelligence so that you can “be there” for your consumer and business customers.   

To find out more information about IFM’s solution or to get details on the free no-obligation trial of our service, please reach out to me via our website at Infimark.com.

 

 

As Digital Banking takes off, Personalized Marketing will become more important for the Banking Industry

A recent Bain & Company article mentions that financial institutions should be concerned that “many consumers look outside their primary bank for high-margin products”.   However, the article also contains recent survey results that note “most customers who received direct offers would be willing to buy more from their primary bank if it made a personalized offer”.

The article discusses how the rise of digital banking, in part caused by the global pandemic, has led to the hidden defection of bank customers.   As more consumers turn to digital banking it will be imperative for banks to personalize their messaging to customers to compete more effectively in today’s challenging environment.

What is Personalized Marketing?

The term personalization means reaching consumers with messages, pricing, and offers tailored specifically for them. This form of one-to-one marketing uses sophisticated analytic tools to analyze customer data to determine customer needs.

Banks are moving rapidly to leverage personalized messaging by using machine learning and data science tools to process a vast amount of customer data. Insight Financial Marketing is a leading innovator in this segment of the industry. IFM’s service enables banks to analyze the patterns in their transaction data to anticipate specific customer needs. A customer is more likely to purchase a bank product or service if the right offer is presented to them at the right time. This creates a win-win situation where the customer gets the service or product they need, and the bank generates revenue.

The Future of Bank Marketing

By leveraging IFM’s technology, financial service firms will be able to utilize customer intelligence to structure their products, services, and pricing based on customer needs.

For instance, combining artificial intelligence and machine learning with customer insights via IFM’s service has the potential to be a real game-changer. By leveraging IFM’s technology, financial institutions have greater precision in assessing risks, predicting life events, and lifestyle changes.

Personalization has made it possible for customers to save money by presenting the right products and services that meet their current and future needs, while also allowing financial institutions to prosper by developing deeper relationships with their customers. The future of marketing in the financial services industry is being shaped by a rapid shift to the personalization of communications brought on by modern data analysis tools provided by IFM.

Conclusion

With IFM’s industry-leading customer intelligence solution, financial institutions will have the technology and experience to leverage personalized marketing that will drive revenue growth and enable your firm to compete more effectively in today’s challenging environment. To discover how your firm can engage IFM’s solution please contact me via our website, Infimark.com, or via my LinkedIn page.

Cutting edge technology has fostered rapid innovation throughout various industries over the past ten years. This rapid change is impacting the financial services industry with full force, especially during this difficult COVID environment. Consumers and businesses are rapidly searching for solutions to meet their needs. Examples of this change include real-time P2P and contactless payments, investment robo-advisors, free stock trading, and app-based financial technology such as Dave™, Chime™, and Square’s CashApp.  

Additionally, historically low-interest rates, coupled with an uncertain economic environment that has stunted the appetite for lending at many institutions, have put pressure on banks to find ways to generate revenue.

Deepening relationships with existing customers is one avenue financial institutions will travel as they revamp their strategy to generate revenue while also helping customers navigate their financial journey. One challenge with this strategy is the fact that every customer has a unique journey. A one-sized approach to helping consumer and business customers in their time of need is no longer effective. Data-driven intelligence is necessary in today’s world to create personalized solutions for customers that meet their immediate and future financial needs. A powerful way to develop insights that will assist FI’s in deepening relationships is through analysis and evaluation of electronic financial transactions. IFM provides an easy to deploy solution that provides near real-time customer insights.  

Using IFM’s service and capabilities, FI’s can –

  • Utilize powerful customer insights to aid in the development of new and innovative products and services
  • Identify changes in customer behavior and predict future needs in near real-time
  • Have a resource that provides clean data to power AI and machine learning initiatives
  • Know whom to communicate with and when to communicate personalized messages

If you’d like additional information on IFM’s service and capabilities, or would like to learn more about IFM’s free, no-obligation evaluation of ACH and Card data, please contact us via our website, or reach out to me directly via my LinkedIn page or my email address at rreale@infimark.com. I’ll look forward to communicating with you and helping you along your journey toward developing an enhanced data-driven customer intelligence capability.  

Check out my latest vlog where I share more about the challenges customers are facing during the global pandemic.

 

 

 

Consumers and Businesses shift to enhanced digital functionality

Even before the COVID crisis, consumers and businesses were rapidly shifting to solutions provided in a digital transaction environment. For traditional financial institutions, adapting to these fast-moving changes is paramount to consumer and business banking customer retention and deepening relationships.

How is competition evolving as the shift to digital financial services has been accelerated during the COVID crisis?

Intuit’s QuickBooks Cash:

Earlier this Summer, Intuit’s QuickBooks™ rolled out QuickBooks Cash™, a component of their service to small businesses. Intuit partnered with Green Dot Bank to integrate access to a bank account directly within the QuickBooks platform.   Within QuickBooks and QuickBooks Cash, businesses now have access to a debit card, instant deposits, and bill payment. Many small businesses leverage QuickBooks to help manage their accounting, payments, and payroll within the digital platform. The addition of QuickBooks Cash may entice businesses to move more of their business banking relationship to Intuit’s ecosystem.

SoFi Money:

SoFi is a fast-growing fintech firm that began by offering student loans on a digital platform. Since its founding, it has rapidly moved to become more bank-like by expanding its digital payment services. This includes its new offering of SoFi Money™ a high-interest cash management account that also includes a debit card, integrates P2P transfers, and a mobile app.

What strategy can your Financial Institution deploy to compete more effectively:

As your financial institution shifts to offer more digital functionality, your FI has a wealth of information about your customers that is unique to your firm. By leveraging this information, your FI can identify shifts in digital behavior and target communications and messaging to specific segments of your customers. As an example, many of your customers have an existing relationship with QuickBooks and SoFi, and the growth of engagement with these companies continues at a rapid pace. By using a data intelligence service like the one offered by IFM, you can identify which of your customers have a relationship with these firms and track any changes in activity to enable targeted communications to be delivered in near real-time to limit relationship depletion as new services and capabilities are added by competing non-traditional financial institutions.

For more information on how your FI can leverage IFM’s services, we’ve added additional information on our website at infimark.com. IFM offers a free evaluation and analysis giving FIs a detailed view of competitive customer relationships and identifying opportunities for the retention and deepening of consumer and business banking relationships.

Check out the latest vlog from Rob Reale where he discusses how consumers and businesses are finding digital solutions to their financial services needs.

 

 

Insight Financial Marketing recently presented a webinar called: Outlook for the Future: Bank Strategy During COVID-19 and Beyond.

We discussed the rapid changes to the economy as well as the impact on the financial situation of consumers and businesses. Now more than ever, financial institutions must have a deep understanding of the financial needs of their consumer and business customers. If your FI has not adopted a strategy to leverage intelligence from your bank’s data to help identify customer behavior trends, it will be more difficult to keep and retain customers because of their rapidly changing needs.

The New York Times recently reported a graphic showing how states are at different stages of reopening across the country. Some are open as normal, some are reopening, some having paused their reopening, and some have reversed and are imposing new social distancing and business closings. The graphic shows how states have proceeded with balancing the spread of COVID-19 by reopening their economies. Even within the footprint of your financial institution, your customers’ financial situation may vary depending on where they live and work.

We also shared insights on how investors have reacted to COVID-19 and economic uncertainty.

Two points here:

    1. Investors have rewarded technology firms as consumers and businesses have shifted their digital behavior.
    2. Retail investors are much more active in the markets due to technology applications that have facilitated free stock trading (driven primarily by the growth of fintech firm Robinhood).

The spending behavior of consumers has been shifting as well. The top earners have dramatically reduced spending while the lowest earners have remained the same. We discussed how the CARES Act has led to a rise in deposits, especially for the largest banks in the country.   In addition, most financial institutions have seen a more modest rise in deposit balances compared to the top 5 largest banks in the US.   The combination of reduced spending by high-income earners, and the influx of stimulus and COVID relief payments from the government will not continue for long. We believe that deposit retention and growth will continue to be important in the years ahead, especially in a low rate environment.

If you are interested in viewing the 30-minute webinar, please let us know. We will gladly provide a link to view the recording.  In the meantime, check out our latest vlog for a snapshot of the webinar content.

 

 

Insight Financial Marketing is an industry leader in helping financial institutions leverage customer insights, detect behavioral changes, and adopt a strategy to better serve the rapidly changing financial needs of its consumer and business customers. To learn more about utilizing our Intelligentsia™ technology please visit our website.

Has your financial institution’s strategy changed as we moved forward through the Covid-19 virus outbreak?

Digital banking has leveled the playing field in financial services. Regardless of the location of your branch network, digital banking capabilities have enabled competitors to entice more of your customers to move various components of their financial lives away from their primary bank or credit union.

Social distancing and quarantines have only accelerated this shift as consumers were forced to move their financial activity to mobile and online apps, and quickly discovered other financial technology that made their lives easier or solved a specific need. The move in this direction had already begun before the outbreak of the virus.

While competition from purely digital banks and traditional banks with enhanced digital capabilities continues, financial technology provided by non-banks has also attracted consumers looking for a solution to a specific need.

One example is the Apple Card; a credit card provided by Apple and Goldman Sachs. It seems like ages ago, but Apple and Goldman Sachs launched the Apple Card in August of 2019 with great fanfare. The credit card has many unique features, including the cashback rewards being instantly added to the user’s Apple Cash account, and the ability to make payments towards the balance at any time easily. The card can be used for contactless payments, which is another sought-after feature in our COVID-19 virus environment. Insight Financial Marketing has observed that consumers have engaged with the Apple Card at a very rapid pace from the time the card was launched.

The Apple Card is not the only new financial technology that has been popular with consumers. Many consumers have engaged more with the slick user interfaces and app functionalities that other technology firms have developed, like Acorns, Chime, Dave, Cash App, and Venmo.

  • Is your financial institution aware of recent consumer behavior trends that are percolating within your customer base?
  • What will be your strategy in the new digital world that we are rapidly transforming into, to keep and retain your customers?
  • Which of your customers have engaged with the Apple Card?

Having keen insight into customer behavior and consumer trends is a competitive advantage that financial institutions must more fully leverage to retain and grow your customer base and deepen engagement.

Insight Financial Marketing’s solutions will enable your financial institution to leverage near real-time customer insights and detect and identify rapidly changing consumer behavior. We would look forward to communicating with you further, regarding additional information about our capabilities, and a free consultation and analysis.

More information on the impact of digital services can be found in this video from IFM.

 

The outbreak of the COVID-19 virus in the US has wreaked havoc on the nation’s economy. Financial Institutions have been particularly challenged as the rapid increase in unemployment has led to a decline in income deposits. However, it appears that the CARES Act relief payments for individuals and businesses have temporarily off-set the decline in income deposits. As the country works its way out of the economic slowdown caused by the virus, Financial Institutions will need to continue their focus on retaining and growing deposits as the government stimulus abate in the near future.

Here are four strategies financial institutions can deploy as we work our way through the crisis, to help deepen relationships with existing customers and enable continued deposit growth.

 

 

A common theme amongst these strategies is the underlying importance of having well-developed customer insights to help deepen the engagement of your customers.

 

1-Develop and Elevate Competitive Savings and Investment Offerings

The COVID environment has shown a need for families, businesses, and individuals to have and regularly contribute to an emergency fund and to re-evaluate their retirement and savings strategies. Understanding which customers are savers and investors, and which customers are spenders will help banks target specific messaging to educate customers on savings options and strategy tailored to fit their lifestyle.

 

2-Digital Marketing Efforts

During the COVID crisis, consumers moved rapidly to live and work in the digital world. This experience will accelerate the number of consumers and businesses that move more of their financial lives online. Personalization of communications through digital channels can also enhance deposit growth.

Understanding the digital relationships of your customers will be a key capability to better target your digital marketing messaging.

 

3-Marketing Incentives

Developing customer rewards programs that include relationship bonuses and provide incentives on items such as dollars deposited, debit card usage, direct deposit, and online bill payment can also encourage deposit growth.

 

4-Community Engagement (Sponsorship and Events)

The Financial Services industry has done well to sponsor and support charitable causes related to helping our communities during this crisis. Continued support for local communities that have been hard hit by the economic slowdown associated with the virus outbreak will generate goodwill and brand awareness.

IFM has a proven track record of helping clients leverage near real-time financial behavior of their customers to grow and retain deposits as well as to increase the share of wallet and profitability.

IFM delivers a wide range of solutions from applying machine learning to predictive models, delivering life event trigger leads, and deep insight into customer channel preferences.

Contact IFM today for a free consultation and analysis.

For more information related to how IFM is supporting financial institutions during the COVID crisis, watch this video for more information.

 

 

How to Increase Deposit Growth at a Regional Bank

Retaining and increasing deposits are among the primary goals at all banks. Achieving these goals has been made a bit more difficult given the increase in product options and different types of institutions that customers now have to choose from. While deposits, in general, have seen some growth over the past few years, there has been a slight disparity in growth trends between community banks and regional banks. Whereas non-community banks saw a 26.7% rise in deposits in the last five years, deposits at community banks rose 30.7% in the same period.

What Can Regional Banks Learn From Community Banks?

While regional banks generally have a wider market to cover, there are some tactics employed by community banks that others may want to consider. Some examples include localized community involvement, creating calling programs to develop and strengthen relationships, and supporting local business organizations.

1. Develop and Elevate Competitive Investment Offerings

In today’s competitive environment, it is more important than ever for a bank to fully analyze and understand the financial behaviors of its customers. Knowing what types of savings vehicles are used and the institutions they use will help the bank develop competitive products as well as to educate customers on options offered within the bank. Many banks have digital account types that pay better rates and offer brokerage and investment products that customers may be unaware of.

2 – Digital Marketing Efforts

To gain an edge over your competitors, your institution should have a content marketing strategy as well as employ the use of various online marketing techniques for banks. Enabling account opening and a more favorable rate for digital-only access will be attractive to many customer segments. Personalization of product offers communicated through digital channels can enhance deposit growth.

3 – Create Product Bundles

Add value to customers by offering checking account product bundles that include rate bonuses on savings vehicles or discounts on brokerage accounts to attract and retain new deposits.

4 – Marketing Incentives

Developing customer rewards programs that include relationship bonuses on items such as dollars deposited, debit card usage, direct deposit, and online bill payment can also encourage deposit growth.

5 – Community Engagement (Sponsorship and Events)

Sponsoring charitable causes and local events are some of the best ways to support the communities in which the bank does business and to generate goodwill and brand awareness. Business bankers can also join local business chamber of commerce associations to bring the bank closer to the community and to establish relationships.

IFM has a proven track record of helping clients leverage near real-time financial behavior of their customers to grow and retain deposits as well as to increase the share of wallet and profitability.

IFM delivers a wide range of solutions from applying machine learning to predictive models, delivering life event trigger leads, and deep insight into customer channel preferences.

Contact IFM today for a free consultation.

 

 

With the fluctuation in the finance industry, the lending environment is rapidly changing for banks, credit unions, and other lending institutions. Historically, banks have been relying on demographic data, including age, education level, gender, race, and geographic location to segment customers. However, the rising younger workforce has rapidly changed this traditional dataset used by banks, pushing them into a new era of customer behavior.

Banks that have adapted to using customer behavior to determine the borrowing habits of their consumers have found new ways to segment customers based on their consumption habits, needs, and preferences. The changing preferences of the young generation, coupled with technological innovations, are paving the way for banks to adopt a strategic approach towards consumer segmentation. Significant drivers are facilitating the transformation of analyzing behavioral data, thus helping lending institutions understand their consumer habits and abilities. These drivers can be categorized into the following areas:

 

Machine Learning

The rapid adoption of machine learning models enables banks to use predictive analytics to detect patterns within big data. This modern approach gives banks the ability to look at their customer’s historical activities to identify which trends would be of most importance to them as compared to relying on demographic data to predict consumption patterns.

Big data has redefined the banking sector to the point where loan opportunities are identifiable through data analytics. Big data and analytics are helping banks locate and target the right people for financial products by analyzing signals based on life events, behavior, and passive information.

Behavior-based signals are some of the concrete actions that consumers take to indicate that they are ready to purchase new financial products. For instance, transactional data can send signals to the bank that there is a potential customer for a mortgage or a loan to purchase an asset. A consumer’s data builds a profile of predictive signals that banks can utilize to provide different financial products.

Digital Services

The explosion of digital services and products that consumers use daily creates an opportunity for banks to acquire data sources to get a better understanding of their customers’ consumption behaviors. This technique is not new in the US, where companies were reported to have spent $20.2 billion acquiring third-party audience data and activation solutions to support their marketing activities. The banking sector will follow a similar approach to segment customers in ways that yield deeper insights, leading to more effective customer service strategies.

Changing Customer Base

Traditionally, banks and other lending institutions succeeded in demographic segmentation due to the customer classification that existed before the eruption of technology. Generation Z and millennials joining the workforce have transformed the banking sector by being socially aware of the technological advancements, which they use for most of their daily functions, including shopping. It is estimated that 61 million of the millennials will join the workforce by 2022, which is an excellent opportunity for banks to take advantage of the tech-savvy customers to sell their products. Given that the younger lot has little patience for brands that do not demonstrate an understanding of their desires and needs, banks will need to do an in-depth analysis of their consumption patterns to appeal to these consumers based on refined and personalized marketing strategies.

How Banks Can Leverage Buyer Persona

1 – Get A Clear Picture Of The Customer

By understanding customer behavior based on their needs, tastes, and preferences, product managers can utilize this information to acquire a higher customer base for specific products. Understanding website behavior, product interest, social media engagement, and email preferences combined with offline activities such as phone calls can help banks leverage digital technology to create products that appeal to their customer base.

2 – Prioritize Personalization

Today’s consumers demand that brands treat them as individuals through personalized marketing. IT executives in financial institutions can help in classifying data based on customer behavior as a way of helping product managers to develop products for a specific consumer niche. Personalizing each product and consumer can be daunting; hence, with the help of Risk Management Executives, the process can be split into categories to be accomplished in bits.

3 – Create A Seamless Customer Journey

Once personalization is complete, the next step is to tie the customer experience together across channels and devices. Banks must leverage in-house transactional data to help in building a continuous journey with customers. The secret is for the entire banking team to keep learning and looking for new ways to apply analytics for fun and profit.

Looking Into The Future

For the future of financial institutions, data will be the greatest asset that these institutions can utilize to build products for their markets. Banks that can combine internal and external data sources to create value will find themselves well adapted to the digital market that will make up for future generations.

For financial institutions, knowing their customers’ actual financial situation is more critical now than ever. Contact our team at IFM to learn more about how we have emerged as the leader in large scale transactional/behavioral analysis for generating detailed knowledge to better understand your customer.

 

 

The banking industry faces innovative retail banking trends in 2020 with powerful forces reshaping the sector and creating an imperative for change. Banks and other financial institutions must choose what course of action to take – to either lead the change, follow trends, or manage for the present.

Whatever their strategy of choice is, it’s critical for banks to develop new, innovative solutions by taking advantage of big data, transactional and behavioral analytics, digital technologies, and novel delivery platforms.

From making transactions move faster and smoother to the changing and evolving role of retail banks, it’s not entirely clear what the trends discussed below will mean for the sector and the financial industry as a whole. However, the consensus is that the retail banking trends for 2020 discussed below will favor consumers.

6 Retail Banking Trends for 2020

1 – The Expansion of Open Banking

Many view open banking as a European issue and a threat to traditional business practices – the latter is correct. It refers to any initiatives by banks to open their APIs to third parties, giving them access to the bank’s data and functionality. You can use the term open banking interchangeably with API banking, open APIs, banking-as-a-platform, banking-as-a-service, or ecosystem banking.

The concept for open banking encompasses the need for banks and other lending institutions to respond to consumer pressure for painless and straightforward financial experiences. For instance, to buy homes, transfer and receive payments, or manage their financial lives. Fintechs and other big tech companies have already started leveraging the API banking ecosystem to offer financial services.

2 – Real-Time Financial Products

Banks and consumers alike are driving demand for services and products that they can interact with in real-time. This development will see real-time payments become the expected banking norm in 2020. What’s more, the conversation is sure to shift from how banks can set up for a real-time experience to what they can do to become more competitive and attract clients by leveraging real-time payments.

APIs will play a significant role in real-time growth since the fintech community requires them to interact with the banking services that their customers need. Therefore, retail banking trends for 2020 will focus on setting up new, innovative real-time payment services that attract fintech companies and consumers.

3 – Commitment To Digital Delivery

2020 is already shaping up as the year of enhanced digital banking consumer experiences. The industry is ripe for change thanks to the development of new, incredible technology both within and outside the sector that supports digitalization.

For those still mostly offering traditional banking services, they will shift their primary focus to the integration of new technologies and the enhancement of digital offerings with an emphasis on more value and personalized client experiences.

4 – Always-On “Invisible” Banking

As the business world enters the post-digital age, financial institutions will seamlessly integrate their financial services into the daily lives of consumers. This trend has taken the moniker “invisible banking.” An example of an invisible banking transaction is direct deposits.

Technology has created what experts refer to as an “always-on” world where business opportunities appear and evaporate quickly. A time will come when it will not be enough to have the right products and services, but banks must also recognize the exact moment when consumers need them.

5 – Intelligent Assistants and Voice Banking

Thanks to the rapid consumer adoption of voice and digital assistants, it’s now imperative for banks and other lending institutions to seriously consider the implementation of these services. Statistics support this assertion with a 78% growth of voice assistants and smart speakers users in the U.S.

Already, a handful of large banks have invested in digital assistants, including Capital One, Barclays, BofA, USAA, and U.S. Bank. Some smaller institutions like Mercantile Bank of Michigan have also followed suit.

6 – AI-Driven Predictive Banking

The ability to observe, analyze, interpret, and catalog the actions of your bank customers (while respecting their privacy) allows you to design and deliver rich, individualized experiences that will help build customer loyalty during the post-digital age.

Therefore, the banking industry is leaning towards the consolidation of all internal and external data to build predictive profiles of their customers in real-time.

Banks with a competitive edge in the market will go a step further to help their customers optimize their spending, give them preferred access to excellent deals, and nudge their behaviors in a way that creates a better long-term financial health.

One AI challenge that many institutions face is finding a balance between privacy and proactive insight, which is where transactional and behavioral analytics apply.

The Bottom Line

As the financial services industry undergoes rapid change and retail banking trends in 2020, institutions must invest in transactional and behavioral analysis to remain competitive, increase customer experience, and meet strategic goals.

Since 2002, IFM has been providing clients with cutting edge technological solutions, near real-time insights, predictive machine learning-based intelligence, and behavioral-based triggers. IFM’s proprietary processes is what allows them to provide banks with a data standardization solution and near real-time behavioral insight.