Across 90 countries today, more than 850 million registered mobile money accounts make $1.3 billion in daily transactions—mobile banking apps bring the world financial access. Now it’s about usage.
While many megabanks have employed fintechs to increase new checking accounts from 36% to 51% over the past three years, community banks have struggled. In 2020 and 2021, 98% of community banks offered mobile banking. Yet, new account openings dropped as much as 51% to 25% for community banks and credit unions. Why?
The benefit of community banks is they often share a similar customer type. Instead of competing head-on with the big banks on product offerings, community-based financial institutions (CFIs) should strive to understand their unique community needs and offer suitable products.
Does Your Consumer Even Need What You Offer?
When customers feel their bank understands them and offers products that they have been looking for, not only does this build profitability, but it creates trust. Nevertheless, when customers are using external products, how can CFIs know what products their customers need?
Examining transactional data with contextual questions allows CFIs to identify their consumers’ capabilities and match product offerings accordingly. Think about when you start a new language on Duolingo. The app asks a few questions based on context and grades your level. Conditional logic even continues to push questions that match your expertise.
Partnering with fintechs allows CFIs to do something similar, to bridge the gap in understanding consumer needs faster and contextually—without the high costs of infrastructure and hiring data specialists. For a community bank, having such contextual conversation is of paramount importance to meet the community on their level.
Open a Conversation With the Community
The secret to successful financial products is ensuring they meet the customer’s expectations. Continuous communication enables CFIs to generate feedback on services, understand their needs and, over time, build on their trust.
Although AI-powered voice assistants are still maturing, they open a conversation and have tons of engagement: More than 95% of smartphone users said they use their built-in voice assistant. They are a neutral medium: When a consumer hesitates to talk to a human, the chatbot becomes a bridge to offer support and connect the consumer with the CFI. And imagine if they could ask your CFI assistant about how to improve their credit score or get the right type of loan without typing a word, waiting on the phone line for hours, or even leaving their home.
When you make things easier for people, you remove usage barriers. A trusting connection also means customers are more willing to share essential user data: The backbone of better product and service enhancements—simplifying customers’ lives even further. Chatbots allow CFIs to take in vast amounts of data and give context to customers’ issues, so in turn, they can provide more suitable advice.
Fintechs and banking chatbot providers driven by data not only improve CFI’s customer understanding and the products they offer but also establish a communication channel between them and the community needs as a whole. And with the additional context virtual assistants provide, conversations with call center employees become more meaningful, too.
When it comes to usage, it’s more than offering customers a product; it’s about ensuring it’s the right product for the consumer. CFIs must look for data-driven fintechs that help them understand the pulse of their community. Partners that combine AI-powered chatbots with advanced data analytics can support CFIs in identifying their specific consumers, building relationships, and providing insights to develop products that benefit their unique audience.
About the Author
Uday Akkaraju is the CEO of BOND.AI, with a background in interaction design and cognitive science and focuses on making machine intelligence empathetic and created the world’s first Empathy EngineTM for finance. Uday was recognized as an ‘International Innovator’ by the New York City Economic Development Corporation. Prior to BOND.AI, Uday founded and successfully ran an artificial intelligence research lab that helped early-stage companies design the product and take it to market. He regularly speaks at international AI & FinTech conferences such as the Mobile World Congress, Paris Fintech Forum, Money 2020, IBM Tech Talks, Signal, Finovate, Voice and more.
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