From “Seamless & Personalized: The AI Edge For Omnichannel Customer Engagement,” a Curinos webinar presented in conjunction with Consumer Bankers Association on May 7, 2024, featuring Sarah Welch, managing director, and Olly Downs, chief data scientist.
The customer growth model is under pressure, thanks to disintermediation, loss of fee revenue and skyrocketing CPAs. Growth increasingly will need to come from deepening existing relationships at scale across all channels. Personalization is the best way to achieve this.
Personalized treatments drive up overall response rates by creating multiple “optimal” executions. Its many use cases include onboarding, deposit augmentation and retention, cross-selling, card utilization, line utilization and pre-collections. Generative AI has now turbocharged the possibilities, so financial institutions can take a giant leap forward in their personalization efforts.
Here’s what institutions seeking to tap into the potential of AI-driven personalization should be thinking about:
1. FI marketers are only in the early innings of personalization.
Personalized programs show up in apps, in digital marketing interactions and within call centers, but at most responding institutions, they represent fewer than one-quarter of all programs. Batch programs are still very much the norm for the industry, versus those that are always on and personalized to customers. Only at the largest banks are more than half the programs always on.
2. Martech investment is the most significant budget line item for a CMO.
Since 2016, as FIs pursue personalization, marketing technology has been the fastest-growing budget item. Although martech has stabilized this year at about 26% of the overall marketing budget, this could be the calm before the storm. AI is set to restore the upward trajectory as institutions work to reach ever greater levels of personalization.
Marketing Budget Allocation 2023
3. The typical FI leaves $70 per customer on the table because of poorly orchestrated omnichannel relationship development.
Siloed cross-selling results in an uncoordinated experience where each touchpoint further erodes customer responsiveness. By bombarding customers, FIs train them not to respond to or engage, which drives up the cost of value acquired. Individual product and channel silos need to be stitched together to deliver a cohesive experience. This is where personalization becomes essential as a path to primacy for each customer that’s more effective than a much narrower rules-based approach.
Bombardment from product silos decreases response rates, increases CPVA.
4. Personalization means different things to different stakeholders.
In Curinos’ just-released Personalization Benchmark Study, respondents played back 681 ways to describe “personalization.” It’s something of Rorschach Test for marketers, technologists, product heads and heads of analytics. But there’s one common theme that spans the range of responses: sending the right message to the right customer at the right time.
5. AI’s efficient closed-loop feedback outmuscles the linear process.
Marketing campaigns tend to be linear: plan the campaign, identify the audience, design creative, A/B test, analyze. Often, it requires countless staff hours to prepare creatives for a full campaign. AI drastically compresses the go-to–market sequence, which frees up time for the team to design new assets to add into the ongoing optimization process. That means scaling to thousands of potential contexts versus only dozens, which can lead to exponentially greater efficiency and lift rates 2X to 3X higher.
Fewer distinct competencies achieve an exponentially scaling number of contexts.
