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Among the more recent technologies, Artificial Intelligence (AI) could have the most significant impact on the financial services industry.

First discovered about 70 years ago, AI has transformed many industries already. From supply chain to retail and travel to education, AI has completely changed how work is done in these industries. The technology is predicted to have a similar impact on finance.

Common Challenges in Finance Marketing

Although financial service providers face many marketing challenges, most providers struggle with three fundamental problems, namely:

Commoditization

As the financial services market grows (thanks mainly to digitization), so does competition. Today the competition is so high that many financial services providers find themselves offering the same products.

Commoditization is a situation where the products and services offered by multiple market players are pretty much the same. When this happens, products from competing players can become interchangeable. As a result, consumers feel that they can move between service providers without losing value. Where there’s high commoditization, it’s very easy to lose customers no matter the quality of your branding.

Lack of Consumer Trust

For a long time now, financial service providers have complained about the lack of trust among clients. In a 2016 survey by the National Association of Retirement Plan Participants, for instance, over 90% of respondents said they did not have faith in their financial services providers.

Again, the chief contributor to the increased distrust is technology. After witnessing so many cyber-attacks and data breaches in the last few years, the majority of consumers feel that their data and money are not safe. The financial crisis of 2008 also seriously eroded the little trust consumers had in financial companies.

Automation

In most of the industries where technology is revolutionizing work, automation is one of the major highlights. In these industries, you’ll find many tasks being automated. You’ll also likely find robotic machines working alongside humans to complete tasks faster and with fewer mistakes.

Unfortunately, the finance industry has lagged in automation for several reasons, one of them being the delicate nature of the landscape. In finance, even one small mistake can have grave and far-reaching consequences. Compliance and regulations also make automation a big headache, often forcing providers to stick to traditional, familiar methods.

How AI Solves the Perennial Challenges

Although it’s impossible to solve all the challenges in finance completely, experts predict that Artificial Intelligence can ease many of the problems. Here’s how;

1 – Smarter Credit Decisions

More than three-quarters of consumers prefer to pay via credit and debit cards. Indeed, only 12% of today’s consumers still prefer to pay in cash. What this means is that the credit card segment is more important to financial institutions than ever.

Artificial intelligence provides for a faster, more accurate assessment of loan candidates – at a lower cost. Better still, AI-powered credit assessment solutions account for a wider variety of factors, leading to better-informed, data-backed decisions.

2 – Risk Management

In financial services markets, risk can be deadly if not given proper attention. Accurate predictions are critical to the protection of businesses.

AI will play a starring role in risk management going forward. Using superfast computers and AI solutions, providers can handle vast amounts of data in a short time. Cognitive computing (a branch of AI) helps to manage both structured and unstructured data, making it possible to catch potential issues early.

3 – Analysis of Customer Behavior

In the financial services industry, institutions find it difficult to develop the same deep relationships with customers that may exist with companies in other industries. Through transactional and behavioral analysis, artificial intelligence is empowering the finance industry with the ability to analyze money movement at scale so F.I’s can anticipate the future financial needs of an individual customer. Service providers such as IFM can work with banks to foster the development of A.I. solutions via IFM’s cutting edge technology that cleans and categorizes bank customer electronic financial transactions in near real-time. IFM’s data analytics service enables financial services firms to offer timely products and services to their clients and strengthens the relationship between a customer and the F.I. With IFM’s capabilities, a financial services firm can analyze client behavior and money movement – in near real-time – and can also trigger security mechanisms if patterns of transaction activity seem unusual.

4 – Personalized Banking

Personalization is the new way to market – even in finance. In multiple studies, consumers have made it clear that they are more likely to buy if the experience is personalized. In one study, for instance, 44% of respondents said they are likely to become repeat customers if a brand offers customized services.

AI currently offers some of the best solutions for personalizing the marketing of financial solutions based on consumer behavior and transactional analysis.

Bottom Line

Financial Services firms are faced with three common marketing challenges: Commoditization of products and services, lack of consumer trust, and the ability to automate solutions. Artificial Intelligence will help to solve these perennial challenges by providing an opportunity for smarter credit decisions, improved risk management, and a more in-depth analysis of customer behavior to provide a more personalized banking experience.

What strategy should your institution move forward with to solve these marketing challenges? Data Science experts believe that the key to developing A.I. solutions that guarantee better productivity and ROI rests on access to clean and categorized transaction data that can be utilized to power A.I. related solutions.

Reach out to our team at Insight Financial Marketing today to learn how IFM’s Intelligentsia™ service could have a positive impact on your institution’s ability to market the financial solutions of the future.

 

 

The digital migration is swiftly revolutionizing the way customers buy products and services. Now that digital banking is used by approximately 51 percent of the world’s adult population, financial institutions should focus on creating a sustainable digital marketing program for a fully digital world. This starts by understanding the applicable digital marketing metrics. The following are the six categories of metrics behind digital marketing for financial services:

1. Traffic Metrics

Traffic metrics are mainly measured and monitored during the traffic generation stage. They are very crucial for both SEO and Pay-Per-Click digital marketing strategies. There are several aspects to consider when evaluating traffic metrics, including site traffic and sources of traffic.

Site Traffic

Significant changes in the overall website traffic can give you an insight into how effective a particular digital marketing strategy is. When evaluating the overall site traffic, you should not only focus on the number of page views or hits your site gets, but you should also consider the number of unique visitors your website gets within a specific period. The more unique visitors your website gets, the higher the probability of acquiring potential customers.

Sources Of Traffic

Identifying where your website traffic is generated from and what specific keywords brought them to you can give you an insight on where you should focus your digital marketing campaigns. If search engines are the primary source of the most traffic, you should focus your efforts on SEO marketing. If most traffic is coming from social networking sites, you should focus more on social media marketing, and so forth. Be sure to explore other traffic sources that may prove to be beneficial for your business.

When evaluating the sources of traffic, it is important to assess both the number of mobile and non-mobile website visitors. As more and more people access the internet through their Internet-capable mobile devices, digital marketers must consider mobile traffic an important metric.

2. Engagement Metrics

Is your website content resonating with your website visitors? After reading your content, do they take any action and, if so, how consistently or regularly? Are website visitors downloading white papers and e-brochures or filling out forms?

There are various ways you can evaluate engagement metrics. One of them is by checking the number of clicks your pay-per-click ads receive. Another way is tracking the number of comments, likes, shares, and reposts on social media. You can utilize Google Analytics to track website and app engagement metrics, including page views, unique visitors, and the average time spent on your content.

To boost engagement, you should consider including at least one call-to-action on each of your landing pages, services pages, email, or any other marketing channels that presents a conversion opportunity. You should also review all of your communication channels so you can identify the ones that are generating your desired response. By doing so, you will be able to determine what to change and what to replicate in future digital marketing campaigns.

3. Retention Metrics

Retention metrics are all about establishing whether you are holding your prospects and customers’ attention beyond the initial contact. You should not only check the number of returning website visitors and social media followers, but you should also take note of the bounce-rate, opt-out rate, and the number of unsubscribes.

If the retention numbers outnumber the opt-outs, it’s a good sign that your marketing message is resonating with the target audience. If the retention numbers are decreasing, you should revise your messaging and align it with your target audience’s needs.

4. Conversion Metrics

While getting lots of traffic to your website is an achievement, it won’t mean much if your site visitors remain just that – visitors. The primary purpose of your digital marketing campaign is to convert website traffic into potential customers. As a financial institution, the conversion metrics you should pay attention to are the number of new account openings and new loan applications you get after launching your digital marketing campaigns.

5. Revenue Metrics

The success of your digital marketing campaign can be evaluated appropriately by revenue metrics. You can determine the Return On Investment (ROI) by assessing the website traffic that eventually converted into new business leads or paying customers. By evaluating this metric, you will be able to identify the areas in your digital marketing campaign that are driving sales and revenue.

6. Cost Metrics

This is where you evaluate the amount you spend to launch your marketing campaigns. You have to consider metrics such as the amount you spend on every direct mail campaign you make, every monthly blog post or newsletter you publish, etc. Be sure to determine how each of your marketing efforts is impacting the bottom line, and then use your findings to plan a viable strategy for future digital marketing campaigns and sales cycles.

Data Is An Asset

Everyone agrees that data is one of the most valuable assets any business can have. It’s not the data itself that matters, but what a company does with it. With lots of data at hand, financial institutions have to rethink the way they handle data to be more customer-centric, and, as a result, more profitable.