Shrink your sales cycle: AI is key to deepening banking customer relationships in 2024

Deepening banking customer relationships has become a greater focus, especially amid the ongoing deposit war and nonbank competition. Economic conditions and commoditized products without clear distinction only add to the need for banks and credit unions to make sure the contact they do have with customers is meaningful. In fact, according to “The State of Financial Marketing,” this ranks as banks’ #3 priority, up from #7 three years ago.

From increasing pressure to pay higher rates to retain deposits to launching savvy financial wellness tools, banks are exploring and testing endless strategies to reach a greater audience and foster stronger, deeper relationships, all with the goal to increase deposits and loyalty. Unfortunately, those efforts did not prove all too successful last year. According to the FDIC, total deposits declined by $98.6 billion in the first half of 2023. Deposits were still down in the third quarter, but only slightly.

Meanwhile, the average U.S. adult has 5.3 accounts but less than half (40%) have more than one account at a single bank. With so many banking relationships, it becomes difficult to create and build loyalty. Compounding this challenge, it takes an average of three years for a customer to open a second account. The industry average for a customer to open at least three accounts is three to seven years.

The good news is that banks can collapse their sales cycles from years to a single day, just by asking the right questions online, in branches and during onboarding. This is where a compliant generative artificial intelligent (AI) strategy can be transformative.

The transformative influence of gen AI spans various areas but can be particularly powerful in sales and customer engagement. Against the backdrop of today’s heightened interest rate environment and the intensified competition for deposits of commoditized products, banks are evaluating how gen AI can become a catalyst for revenue generation and institutional growth. Harnessing gen AI in the sales cycle enables banks to augment revenues while minimizing costs, thereby alleviating pressure on net interest margins and increasing profitability.

For sure, AI’s influence extends beyond internal banking operations; it also reshapes how customers interact with banks. When applied to customer-facing channels, AI can increase engagement rates through personalized outreach and tailored product offerings. Despite the high expectation of personalization, a significant gap exists, with only 44% of banking customers feeling their banks deliver personalized services. Here, gen AI becomes a crucial tool for banks to bridge this gap and meet customer expectations, ultimately driving growth with both customers and prospects on all channels and in all lines of business.

Traditional sales engagement is increasingly challenging

Sales jobs are tough. Bank sales are even tougher. Consequently, it’s one of hardest jobs to fill amid historically low unemployment at financial institutions nationwide. Bankers must identify and understand a prospect or current customer’s needs, and then show how the bank can fulfill those needs with the right products and services. This requires an intimate understanding of the products and services offered, and the thousands of product combinations that meet each customer’s needs. No small feat.

This is even harder when selling to business customers, which is becoming a greater priority. According to Jack Henry’s recent strategic priorities benchmark study, serving small and medium-size businesses (SMBs) is a key priority for most financial institutions. Sixty-five percent plan to expand SMB services, with commercial lending topping the list.

Additionally, banks must go beyond simply identifying “next best product,” which essentially offers basic product recommendations. It also typically only provides one product or service. While this is a great start, the intelligence needs to dig deeper to thoroughly identify the customer’s needs. It’s about not just meeting but exceeding expectations, anticipating demands before they are fully articulated, and delivering recommendations that address their needs or pain points. Top of Form

To truly understand the needs of an SMB customer, bankers must ask the right combination of questions and in the right sequence. At the same time, potential customers have numerous channels to engage, from the branch, to online, to marketing outreach, to onboarding to sales in the field.

How can bankers capture the information they need to understand the customer and present the right products, especially when many insights cannot be obtained by standard data points alone. Some needs are best revealed through conversation with the customer.

Mastering sales engagement in banking with AI

Incorporating AI in the sales process can help address these challenges and boost sales engagement across channels, which is crucial in today’s market where competition for deposits remains fierce. Going deeper and wider using compliant intelligence enables banks to compete, grow and gain loyalty.

In the Branch: Transforming In-Person Interactions with AI

The decline in branch traffic, coupled with the industry’s struggle to attract and retain top talent, poses significant challenges for in-branch sales. The adoption of a generative AI-driven approach has proven instrumental in addressing these concerns, according to new data from Salesforce. In fact, salespeople utilizing generative AI reported a remarkable 84% increase in sales, highlighting its role in enhancing and expediting customer interactions.

For bankers, navigating the complexities of diverse customer profiles and banking products becomes more manageable with gen AI. Conversation guides powered by AI equip frontline bankers with real-time information on the bank’s unique products and services, ensuring a more productive and personalized engagement. This not only streamlines the sales process but also fosters meaningful connections with customers, ultimately improving in-branch sales performance.

Online Channels: Converting Abandonment into Confidence

Digital onboarding processes for new bank accounts offer convenience to consumers, yet high abandonment rates persist. AI-driven conversation guides, proven effective in in-branch sales, also play a pivotal role in transforming digital channels. By engaging prospective customers and providing tailored product recommendations, these guides empower customers to approach the application process with confidence.

The interactive nature of these guides addresses the common issues leading to abandonment, such as the overwhelming array of choices and uncertainty about product selection. Additionally, AI facilitates data capture during digital interactions, shortening application processes and reducing abandonment rates. Beyond conversions, AI-driven online guides contribute to lead generation, forming the basis for proactive outreach strategies.

Proactive Outreach: Building Future Relationships Through Data-Driven Insights

Even if immediate conversion eludes an online lead, AI-driven conversation guides serve as a foundation for effective follow-up outreach. These guides, converting a bank’s website into a growth engine, offer valuable insights into prospective and existing customers’ financial needs. By learning about customers’ life stages, upcoming milestones and preferences, banks can craft personalized lead nurturing campaigns and email outreach.

The integration of AI in this context enables the identification of trends and up-to-the-minute insights. Financial institutions can use this information to refine product offers, target relevant promotions and enhance marketing strategies. The result is an increased potential for next-best product offers, driving long-term growth, and fostering customer loyalty.

The application of AI across banking channels revolutionizes sales engagement, addressing challenges in in-branch interactions, reducing abandonment rates in online channels, and laying the groundwork for proactive outreach. As the banking industry continues to evolve, the strategic integration of AI emerges as a catalyst for sustained growth and enhanced customer relationships.

George Noga is CEO of Ignite Sales.