The use of artificial intelligence in banking has grown rapidly in recent years Image Credit: Supplied by Comarch

New times call for new solutions: the use of traditional banking and face-to-face contact is becoming a relic of a bygone era. This requires adaptation – also in terms of building loyalty.

Treating customers as a homogeneous audience and falling short of a personalized approach may result in losing ground to more digitized competitors. The solutions offered by banks must be as mobile as their customers, and deftly respond to – or even anticipate – their needs.

Knowledge is power

The use of artificial intelligence in banking has grown rapidly in recent years, but the real-life test was Covid-19. Artificial intelligence (AI) came to the rescue, helping to answer a flood of questions related to the pandemic. According to a recent study by Capgemini, 78 per cent of US consumers have declared that their use of contactless interactions would increase.

Changes in customer behaviour create a great opportunity for banks to take advantage of the situation and accelerate the implementation of mechanisms and solutions based on AI – and these are helpful not only in handling communication processes.

AI can be to banks what a tailor is to a person needing business attire: both can give people what fits them most. In banking, at the core of that is having the right information. Banks have unlimited access to data about customer transactions and purchase preferences, but without proper analytics, it is still just raw data.

Here’s where AI comes in. It turns the data into valuable information, determining, for example, patterns of customer behavior, which allows you to predict the needs of those you cater to.

From there, the next best offer is just one small step away.

Win-win solution

The solution is simple if it turns out that the customer needs a product that the bank can offer on the spot. For example, increase the debt limit if several previous cash withdrawals have failed.

However, imagine a situation where a customer has paid for airline tickets and made a foreign currency deposit. What else will they need for the successful trip that is planned?

Offers for accommodation, insurance, or transport can effectively attract the customer’s attention. Think an app that, in addition to handling banking transactions, is an ecosystem of services related to customer hobbies or lifestyles.

Partnerships are essential to this strategy: banks do not sell accommodation themselves. By finding attractive suppliers for their customers, banks can also gain access to partner data – sales, contracts, contractors, and the potential for acquisition among them. The suppliers, in turn, get access to banks’ customer base, and thus can easily and cost-effectively present their offer tailored to particular segments.

Why so serious

Let's be honest: we like challenges, and we like completing them even more. Another level in a game or a completed goal of 10,000 steps effectively improves our mood.

Similar mechanisms based on the challenge-reward scheme are another level of personalization of loyalty programs. The bank can offer games, quizzes, rankings, or participation in the virtual stock exchange – so each customer can find an activity for themselves.

Through the use of gamification elements, the bank can motivate their customers to undertake specific activities (e.g. monthly savings) or to achieve goals.

The educational aspect is also important – if the bank uses, for example, a virtual character, it can guide the customer through many processes, at the same time providing valuable advice such as budget management. This is especially important for the youngest, so that their financial education is solid, but at the same time not devoid of entertainment.

However, regardless of the adopted scenario, banks should take maximum advantage of the idea of gamification – a loyalty programme with the game elements involved is an impressive tool for collecting feedback, influencing the decision-making process, and ultimately – building engagement and loyalty.

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- The writer is a Business Consultant with Comarch.