- Technology
6 ways financial institutions can harness the power of AI
- Data analytics, social media management, fraud detection and more will benefit from this technology.
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The financial services marketing landscape is on the brink of a renaissance. Unless you’ve been stranded on a desert island, you’ve probably noticed that artificial intelligence (AI) is at the heart of this transformation.
As we move deeper into 2024, it has become crucial for banks and credit unions to not only recognize the potential of AI but actively implement it in their marketing strategies.
Still, a significant number of financial institutions remain skeptical. A full 40% of bank or credit union marketers view AI as “hype” or a passing trend rather than a game-changing tool. In a related study, recent research underscores that banks consider AI and machine learning as the technologies most likely to offer them a competitive edge in the next two years.
Yet, actual adoption tells a different story: less than 30% of respondents identified chatbots or generative AI as pivotal to their strategies. This gap between perception and action is concerning, especially as emerging fintech companies are rapidly leveraging AI’s capabilities to improve customer experiences.
The challenge is not merely about integrating advanced technology; it’s about ensuring relevance and survival in a fast-evolving financial world. Financial institutions resistant to change may find themselves left behind by more innovative and agile competitors. If we look at the numbers, financial institutions’ resistance toward AI is perplexing:
Marketer hesitancy needs a reevaluation. Contrary to the common and increasingly pervasive perception that AI might replace people’s jobs, it doesn’t aim to replace the human workforce but to greatly amplify their capabilities. This misconception is often fanned by the media.
But by adopting AI, marketing and other divisions can function more intelligently and efficiently. A sentiment echoed by 90% of financial marketers is that, while AI enhances operational efficiency, the human essence remains pivotal in forging genuine bonds with clients.
So, how can this game-changing technology serve financial marketers? Let’s dive into the top six ways:
1. Data analytics: AI-powered data models can extract actionable insights, predicting customers’ next moves, attrition rates, acquisition strategies and more. These insights enable marketers to tailor strategies that resonate.
2. Ad targeting and optimization: With tighter marketing budgets, the need for precision targeting is crucial. Accounting for applicable regulatory requirements, responsible use of AI can pinpoint which channels to employ, identify potential clientele and even suggest messaging and visuals for campaigns.
3. Social media management: Vericast’s 2024 Predictions Survey reveals that 53% of bank and credit union marketers will tap into social media in 2024. AI can supercharge this initiative, streamlining content creation, monitoring brand mentions and spotlighting trending discussions.
4. Communication: Chatbots have transformed the first-touch communication landscape. While they can’t replicate the depth of human interactions, they efficiently handle preliminary inquiries, routing more complex issues to human staff.
5. Predictive analytics: By analyzing past behaviors, AI can forecast a client’s future actions. This could range from identifying potential account closures to detecting possible loan defaults. Acting on these insights can save both money and client relationships.
6. Fraud detection: AI’s prowess is already evident in fraud prevention. By evaluating purchase behaviors and historical data, it can halt fraudulent activities in real time. Adopting AI doesn’t necessarily signal a philosophical and strategic marketing strategy overhaul. Small, tactical implementations can yield substantial results, laying the groundwork for further integration.
The financial sector is witnessing increased adoption of artificial intelligence, and the path forward is one of continuous learning and innovation, including careful consideration of legal and regulatory requirements.
When it comes to embracing AI, partnering with the right team is a top priority. As we navigate through 2024, it’s clear that the thoughtful integration of AI in financial marketing is not an option but a necessity. The versatility of AI, spanning from data analytics to fraud detection, equips marketers with a comprehensive toolkit to elevate their strategies, ensuring they remain competitive and relevant in this swiftly evolving digital era.
Alexa Bennett is content marketing manager for Vericast.
A version of this article first appeared in the BAI December Executive Report: “2024 Banking Outlook.”
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