In the digital era, mobile and social media have become major channels for marketing. A fundamental difference from the pre-internet era is the concept of personal space. Mobile phone users consider their device to be their personal space — and dislike intrusions into this space which are not relevant.
Furthermore, this digital era is one of big data. With social media, mobile and internet activities continuously generating a huge amount of data, marketers have access to insights in different forms, coming from different sources and generated at different velocities.
Financial marketers who will be successful are those who leverage big data analytics including machine learning and AI to understand the needs of consumers to provide a personalized experience through targeted communication that is delivered in real-time based on needs. This is the era of hyper-personalization at scale.
Transformation of the 4 P’s of Marketing
Marketing executives can look forward to the next era of marketing where AI sparks a marketing renaissance, according to Forrester. At a time of both overwhelming challenges and opportunities, marketers need all the help possible. The firm’s report shows that AI could revitalize marketing relating to all 4 Ps of marketing.
- Product: faster, more relevant services – Products becoming more relevant in terms of the kind of services they provide. For example, Netflix and Spotify make movies and music more relevant to the user.
- Price: optimization by micro segment – Many players like Uber leverage the power of AI and customer context to optimize pricing and service extensions.
- Place: automation in every channel – Volkswagen has been leveraging algorithm-based recommendation to test display, search and social for all media buying in Germany with the help of Blackwood Seven, which predicts spending decisions using AI.
- Promotions: instant contextual offers – AI is capable of optimizing the right promotion in real time by identifying as many scenarios as desired.
Power of AI in Financial Marketing
AI will assist financial marketers in making sense of the data deluge and promising access to insights on demand. With the use of expanded data and technology, bank and credit union marketing teams will be able to uncover customer needs based on real-time activities and behaviors.
Beyond traditional data that is housed in multiple silos within a financial institution, AI will be capable of analyzing huge amounts of structured and unstructured content from outside the organization. Examples include data like pictures, videos and emojis. This will enable a deeper understanding of consumers as they continue engaging with your products and services.
One of the most powerful capabilities of AI is that it will also be capable of scoring customers in an intelligent manner based on algorithms that can predict the customer’s propensity to buy, and the likelihood of being loyal. In other words, instead of only knowing what a consumer has done, AI can help predict next most likely actions that can help financial marketers communicate based on customer needs and activities.
With AI, marketing teams will be able to focus on the right tasks, such as brand strategy, creative thinking, product innovation and business models. This will result in the team getting more time for building strong creative and messaging.
Humanizing the Digital Experience
As AI technologies such as facial image recognition and speech recognition continue to improve, brands will need to define what their brand voice is when a larger paradigm shift is enabled with this new sensory revolution. Consumer’s ability to interact and share their experiences with the world seamlessly will require financial marketers to redefine their brand’s signature experience.
In other words, AI will be successful when it humanizes technology. For example, chatbots are capable of providing the first line of support and acting as a virtual agent for the end user. Lemonade, a Palo Alto-based rental insurance startup, used chatbots to process claims with the use of AI as a customer-facing virtual agent.
The Forrester report predicts that AI will accelerate the customer experience in the following ways:
- Act on insights with personalized experiences and dynamic content. AI will enable marketers to personalize content, offers and promotions. This will satisfy the need to send targeted content to a growing number of micro segments.
- Automate cross-channel campaigns and optimize marketing mixes. AI will facilitate cross-channel marketing campaigns and will enable marketers to optimize channel mixes and marketing spend over time.
- Blur the boundaries between marketing, sales, and customer care. AI chatbots will continue to improve in the coming years and empower a dialogue between the brand and customers.
- Enable marketers to orchestrate CX across the organization. Like the mobile revolution, AI will allow financial marketers to completely transform marketing. However, monitoring the outcomes of AI algorithms in real time is going to be a key part. Marketers will thus be able to align AI initiatives with the Chief Information Officer, thus reducing costs and delivering better branded experiences for customers.
Challenges with AI Integration
There remains challenges for financial marketers to adopt AI. It is important to realize that obtaining and cleaning large data sets is just the start. It is also important to have skilled data scientists on the team who have the business understanding and a clear goal for the project.
Forrester noted competing priorities and limited budget are the main barriers in marketing but it is short-sighted of financial marketing executives to overlook the fundamental shifts and benefits that the AI revolution will bring across the marketing spectrum. In fact, the adoption of AI technologies in particular from machine learning and natural language processing will go a long way to assisting marketers to solve many of the challenges listed below.
Those firms in the financial services sector and beyond that adopt AI in meaningful and effective ways across the business are those who will be best positioned to win the customer in the future and offer a superior personalized experience across product offerings.
Marketing is the first sector that will be transformed by AI technologies, as it has lower regulatory barriers. We already have seen how effectively tech giants such as Google, Facebook and Amazon have applied AI and machine learning to enhance the customer journey and experience. For traditional financial sector firms to have any chance to compete in the era of 5G, when faster digital speeds will enable AI to move into internet connected devices and enable a real time engagement with customers, there needs to be an urgent consideration of how to apply these technologies as the digital consumer already expects more than the banking industry is delivering.
Report: Humanizing the Digital Banking Experience
The Humanizing the Digital Banking Experience Digital Banking Report, sponsored by BAI, provides insight into the importance of humanizing the digital banking process and how well banks and credit unions are doing in this endeavor globally. Providing a benchmark for future strategic planning, the report includes the results of a survey of more than 200 financial services organizations worldwide. The report includes 69 pages of analysis, 27 charts and 6 international case studies.
Subscribers to The Digital Banking Report and those wishing to purchase the complete report can access it immediately by clicking here.