Preparing Your Bank for the Next Generation Customer

| November 22, 2017

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This is an industry with a famous reputation for doing business "how it has always been done.” According to the recent report Improving the Customer Experience in Banking, only 37% of financial institutions have implemented a formal plan to improve customer experiences by meeting new trends in customer wants/needs.

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Bain Capital Ventures

Bain Capital Ventures partners with disruptive founders to accelerate their ideas to market. The firm invests from seed to growth in enterprise software, infrastructure software and industries being transformed by data. Bain Capital Ventures has helped launch and commercialize 200-plus companies since 2000, including investments in DocuSign, Jet.com, Kiva Systems, LinkedIn, Rapid7, SurveyMonkey, Taleo and TellApart.

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5 Ways AI can Transform Fintech Industry

Article | February 25, 2020

Fintech is one of the fastest-growing industries, owing to the rising penetration of internet users. There is a paradigm shift to mobile devices for performing financial transactions and related actions. Behind the booming fintech market, there are several technologies that are contributing to making the system fast, secure, and scalable. One such technology is Artificial Intelligence (AI). The AI in the fintech market is estimated to reach USD 35.40 billion by 2025 ( Mordor Intelligence).

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How FinTech Can Withstand the Coronavirus Outbreak

Article | April 15, 2020

Soon after, the World Health Organization declared the Novel Coronavirus outbreak an official pandemic, a sudden pandemonium busted across the globe. The COVID-19 crisis carries with it the potential equally disruptive economic fallout. It has brought a dominant shift in reality; in addition to the effects that the virus has had on our private lives, businesses in every industry are being forced to find innovative ways of operating on every level and the world of Fintech is no exception. Investors began drawing out their money. The stock markets of the world collapsed. Central banks made off-cycle rate cuts and inserted liquidity to keep the economy running. The financial services are currently confronting challenges on multiple fronts: banks have reduced their opening hours serving a few customers at a time due to social distancing rules, putting additional stress on channels like telephone service, online banking, and social media. Simultaneously, numbers of consumers are desperately trying to contact their bank with questions, concerns, issues, or to request appropriate solutions for their finances impacted by the fallout from the coronavirus. This is not the first or last global crisis. FinTech and banking companies of the 21st century need to be programmed to operate in such circumstances. Being a fairly new sector, fintech companies are already well-positioned to adapt to a world that suddenly exists primarily online; most fintech platforms now exist in online formats anyhow. Still, the paradigm shift brought to the world by coronavirus is forcing the fintech sector to come up with creative solutions when it comes to supporting customers, building relationships, boosting company morale, and planning for the future in this unprecedented situation. The behaviors that people can execute from their living room or from their den are going to grow, and behaviors that require face-to-face interaction or getting out into the community are going to diminish. What does that mean? You should have greater mobile apps and digital adoption in general. If I had been holding off on signing up for PayPal, for instance, I might just do that. Nigel Morris, Managing Partner of QED Investors, Co-Founder of Capital One “Fintech companies are probably some of the best-equipped organizations to take on this crisis.” If you’re a Fintech, you’re probably no more than 10 years old and as a result, have built your backend and developmental stacks on cloud environments allowing for operations to continue anywhere. Also, many business-to-business (b2b) communication tools that FinTech companies have naturally adopted and made available to employees such as Slack, Teams, Skype have been more heavily leveraged. Legacy financial brands are more than likely finding this time to be a bit more difficult. Paul Geiger, President, and Co-founder of Post-Trade Asset Management Firm Theorem Technologies The coronavirus pandemic could be destructive for multiple companies, but it's also flashing a spotlight on the potential of fintech. It has the potential to revolutionize how consumers and businesses handle financial transactions. There will surely be hits and knocks along the way, but fintech can manage to make this transition a lot easier. Here’s how. Table of Content: - Moving Back to the Digital Infrastructure - Utilizing Robotic Process Automation Software in Banking (Robo-Advisory) - Acceleration of Cashless and Contactless Payment Methods - Artificial Intelligence and Block chain Technology - Fintech Firms Providing Free Technology During the Coronavirus Crisis Moving Back to the Digital Infrastructure As the number of cases ticks up in the U.S., many are choosing to go cashless to circumvent potential hygiene concerns around handling banknotes. Almost half of the world’s population is now practicing self-quarantine. Interaction between humans is limited. All the public gathering places are closed down. Businesses that rely on people coming in or the shops that are commonly crowded are now starting to close down. The prevailing crisis will change our mindset and habits and make us re-evaluate our current way of doing things. All thanks to fintech, giving smaller communities a chance to keep their business open and operating. With digital payment options and online transactions, you can pretty much order any service, any product. You can even access your favorite types of entertainment online and all that without breaking the rules of self-isolation. Social distancing is the only effective method to fight the spread of coronavirus, and fintech has made this practice much more natural. Online services that we can pay for through fintech are now substantially covering every industry. These digital services have become such an essential part of our lives, and we should be appreciative of how easy it is to quarantine these days. Ordering groceries, favorite food, watching the newest movies, stuffs delivered right to our door, all this is only possible, because of different financial technologies and digital payments that have made money transfer easy and secure. Learn more: https://www.euronews.com/2020/03/19/next-day-delivery-the-challenges-for-retailers-during-the-coronavirus-pandemic Utilizing Robotic Process Automation Software in Banking (Robo-Advisory) Robo advisors, without human interference, provide automated support for all financial advisory services, such as trading, investment, portfolio rebalancing, and tax saving. It works with a pre-defined algorithm and analytics, calculating the best returns and plans for each individual as per his/her requirements and preferences. The need for no-touch and low touch investment solutions, which can deliver more informed intelligent analytics back to the user, will be more important than ever. Robo advisors are the next level in the evolution of asset management and financial advice. For the banking industry, robotics outlines a unique and underutilized way to increase productivity while minimizing traditional repetitive and manual-labor-intensive processes. The growth of Robo advisory services is attributable to the fact that it enables low-cost services, scalability, cognitive advice, and next-generation user experience. Though, for the next generation, virtual agents may be an acceptable help for financial matters. It is a fact that client advisors must fit with Robo-Advisors and artificial agents and a human-led technology-enabled model to a technology-led human-enabled business model in financial services. Acceleration of Cashless and Contactless Payment Methods The new coronavirus fears could be enough to introduce mobile and cashless payments to those who otherwise didn’t see the appeal. Learn more: https://capital.report/blogs/how-open-banking-is-catalyzing-payments-change/8262 Before the outbreak, mobile payments in the U.S. had not come close to global adoption rates. In China, by contrast, more than 80% of consumers used mobile payments in 2019, according to management consultancy Bain. In the U.S., major mobile payments apps had adoption rates of less than 10%. Major payment companies have already warned of the virus hitting U.S. spending. Visa, Mastercard, and PayPal have all cut guidance due to the coronavirus. I think this is an opportunity for a move to digital. Zelle, PayPal, and online banking could see a boost. I believe this crisis will accelerate and move people to utilize all forms of digital financial services. Peter Gordon, Executive Vice President and Head of Emerging Payments at U.S. Bank, The mobile fintech payment service that facilitates easy online and off-line payments are reaching millions of people and can truly capture the under banked population. The coronavirus crisis represents a huge opportunity to accelerate cashless and contactless payments. Retail and consumer payments are leading the way in the adoption of innovative payment capabilities aided by the growth in e-commerce and increased penetration of mobile phones. B2B opportunities are also gaining increased traction as a result of being more efficient and cost-effective. Some key trends in digital payments are: Contactless payment. This includes Near Field Communication (NFC) adoption, host card emulation and QR code generation for electronic interactions between consumers and retailers. Adoption of payment hubs. Banks are getting interested in looking at investing in harmonizing their payment infrastructure by moving to payment hubs. These hubs can process any form of payments irrespective of the origination channel. Real-time payments. This is transforming the retail funds' transfer process by providing electronic cash to anyone in the span of a few minutes. Peer to peer money transfers has been around for a while and have witnessed high growth. Virtual currency. Built on blockchain infrastructure this offers greater speed and efficiency of the transaction. Rise of marketplace banks. Challenger banks are being supported across geographies and given licenses to operate freely. Banks, by adopting open banking, has started exposing their APIs to third parties for large scale payments. Omni channel offerings. The framework of digital payments provides a seamless customer experience across channels leading to better transaction experience. The future of payments was already revolutionizing with new entrants such as contactless payment, NFC enabled smart phones, cloud-based PoS, and digital wallets. The crisis will merely accelerate the desire to tackle the issues with these new banking technologies. Artificial Intelligence and Block chain Technology Artificial intelligence and machine learning built upon distributed datasets and shared information are used for dynamic and psychographic client segmentation based on behavior and automated investment services. The adoption of such technology will become pivotal for large financial institutions to manage their client base and investment portfolios efficiently. In fintech, blockchain finds application in areas like digital ID, customer authentication, insurance, to name a few. Blockchain practitioners are experimenting with this technology to bring out new use cases and applications to solve the complicated issues in the fintech industry. PWC’s study of financial services and fintech shows that about 77 percent of the financial services industry is planning to adopt blockchain by 2020. The blockchain sector in fintech has been intended to provide banking with a more seamless and efficient experience. We will soon see the process of cash to crypto and vice versa to become ubiquitous. Blockchain asset management solutions are an alternative to offshore banking because there are substantial efficiency gains for cross-border transactions, for both private clients and businesses. Traditional banking and blockchain solutions will converge over the next decade with blockchain to become a commonly used technology in financial services. Learn more: https://www.forbes.com/sites/jeffkauflin/2019/12/26/five-fintech-predictions-for-2020-according-to-kleiner-perkins/#40c46b7d3d5a So, when we look at these phases of development in the fintech sector, we understand that it’s not just about inserting technology into banking, there is a larger shift here. Part of the shift is around trust and the utility of the bank. Fintech Firms Providing Free Technology during the Coronavirus Crisis Right now, you will be feeling the need for more reliability in software and information. Luckily, some fintech companies and teams are there to alleviate these issues. To help banks help their customers through these difficult times, many fintech providers are extending free, discounted, or accelerated deployment offers to financial institutions. Conclusion Business downturns are not uncommon. Sometimes there are unexpected circumstances. During these periods of change, the winners and losers will be defined by those firms able to make quick and decisive transformation reflecting the new environment. This is not just true in banking but in every industry. Fintech companies from across the world are all-in when it comes to coping with the current global health crisis. The progressions in digital technology are making the crisis more bearable and are empowering businesses to keep working with access to key services (communication, payments, credit, collaboration, etc.) while enabling social distancing and helping to fight COVID-19. We expect digital technology to experience another boost during and after the crisis.

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Effective Use of Intent Data for Financial Institutions

Article | June 30, 2021

The world began its course to become a digital open book after the internet came into existence. With almost everything available for purchase, the internet has brought the world to the buyer's doorstep. With the purchase, comes the data, and with effective use of the data collected within a period, any industry can speculate the buyer’s journey and take compelling steps to attract the buyer. Looking at the facts, around 93% of purchases start with internet research. Intent data is the name of the collection of the behavioral signals that a user shows while purchasing anything. This data helps businesses be available at the right time and the right place to pitch their product to the customer who is already interested in buying what they are selling. Businesses can analyze these signals, accurately understand where the prospect is in its buying journey and can give a solution to the problem. With intent data, even financial institutions can up their game and generate greater ROI while accurately predicting the buyer’s position in its purchase journey, and provide the best value to attract him/her. With over terabytes of intent data available for use, financial institutions can use it to flourish in this pandemic hit economy, using fewer resources and marketing their services to ready to buy consumers. Since its inception, intent data is on the top priority of every marketer’s to-do list, with its usage in advertising campaigns, outreach campaigns, content creation, SEO, etc. This article covers how financial institutions can use intent data to their advantage, provide value to the user, and draw massive attention to their platform to reach their ultimate goal and generate more revenue. Before going further, let’s understand the basic concept of intent data and its type that comes into the use for financial institutions. WHAT IS INTENT DATA? Intent data refers to collecting information on online behavioral insights of internet users or prospects, allowing you to better focus on the audience that has more chances of buying your products or services. To put it simply, intent data will help you display your product or services to those already searching for it. For example, your financial department is facing challenges to keep the accounting on track, checking the organization’s financial status, etc. While, you look for the solutions online, you Google “best financial tool for in-house accounting.” Out of millions of search results, your search concludes with some of the top tools like Robotic Press Automation (RPA) in accounting kept aside. Now, your search would be more specific and according to the selected tools. Now, for comparing and selecting the best tools, you may Google- “How RPA keeps track on accounting?” “What is the ROI of RPA in accounting for small enterprises?” “What is the role of RPA in accounting?” And so on. Notice how your search query got specified after some informative searches. Imagine having the power of intent data of your customers and satisfying them with your content. Intent data helps you nurture a highly targeted audience and eventually convert them into your clients. When prospects face challenges, they search for the solution online. While providing the solution for any specific query, websites ask the prospects to accept their cookies. These cookies monitor their intent of searching and this data is then pushed to the marketers to mold their campaigns suited better for these targeted customers. Let’s look at how financial institutions can focus their campaigns on highly targeted prospects with types of intent data. TYPES/SOURCES OF INTENT DATA The types of intent data divide the vast information of intent into three types - first party, second party, and third party. First-party The data you now gather on known contacts and anonymous visitors is first-party intent data. It can also involve prospective website connections, newsletters, emails, and social media. You can use the first-party intent data to segment messages, build workflows, and get more leads. You can assist your marketing and sales team in determining how to approach and convert a prospect. Second-party Second-party data refers to data collected by another company. It is like gaining insights into your prospects from the shops they have visited earlier. The second-party intent data includes review websites and publishing networks. And all this information is voluntarily provided by the user. Sometimes, the user may also share the contact details and their business email id. Third-party While some systems only track a network of pages, third-party intent data is gathered from all across the web. In several cases, this intent data is extracted using one of 3 techniques: reverse IP lookup, Bidstream data from ad networks and widgets, and media exchange/publishing participants. Third-party intent data can show the user’s intent that is relevant to your campaign. STEPS TO BUILD GREATER ROI FROM INTENT DATA How can a financial institution decide whether a particular lead is worth its investment? Answer: By lead qualification. By segregating each lead into three types, you can decide whether the prospect is an active buyer or someone who wants some information over the web. It allows the marketing team to use their time efficiently and target the leads which are likely to convert. For significant ROI from intent data, financial institutions should gather intent data and segregate it into three types of B2B data- Fit data, Intent data, and Opportunity data. Fit data Fit data shows how well your product or services fit the need of the customers. Imagine if a financial institution provides loans on a low credit score, and a user searches for loans on a low credit score, we can call this collection of information as fit data. With this information, you can efficiently use your time and investment to target a specific prospect. This information collection may include the prospect’s age, sex, job level, job function, and the residing location. Fit data is generally the data that won’t change quickly. It may give you a right fit of prospects for your campaign but cannot tell you the right time or context of search intent. Opportunity data Opportunity data is event-based data on particular prospects. Suppose, you are a financial institution providing a car loan on reduced interest rates, and you come to know that a specific company is crediting bonus salary to its employees. If you market your car loan services to their employees, you can have more leads as you know they have a bonus salary in their account. This is called an opportunity data, which sometimes is also referred to as data scoops that give you information about favorable conditions for sale. As the name suggests, the opportunity data gives you the data of a perfect opportunity to market your services to targeted prospects. Intent data Intent data indicates that the time has come to engage with folks who actively express a desire to acquire a solution. When the intent data is integrated with other signals and a solid fit, the chances of conversion increase dramatically. It's helpful to know when there's movement at a company, but if you don't know who to connect with and don't have a phone number or email address for them, it's only informative. You need actionable data along with intent data to perform a perfect marketing campaign. COMMON USE OF INTENT DATA A Segment to sort out active prospects With the use of intent data, B2B marketers find companies actively looking for products or services they are serving. Intent data solutions provide segmentation tools that you can utilize to sort out active prospects that fit perfectly with your services. This segmentation tool can help you filter your prospect with an unlimited combination of the type of company, contact details, location, industry, and technology they use. Intent data for Account-Based Marketing Leading B2B marketers use intent data to drive their ABM campaigns as it naturally fits these campaigns. ABM and intent data are the two sides of the same coin, as ABM delivers results through specific account’s interest and intent data provides timely opportunities to initiate the contact. Integrating both helps you elevate your marketing reach. Intent Data for marketing campaign Optimization Integrated marketing strategies help financial institutions because marketers can pump useful insights to drive effective and relevant demands. The sales team of financial institutions get into the conversation with the buyer while having more information on their pain points and what solutions they are looking for, giving them an upper hand in exchange. SIGNIFICANT FINANCIAL MARKETING TREND Insight-driven marketing With the help of effective machine learning and artificial intelligence, insight-driven marketing helps financial institutions to offer financial assistance to the right fit of customers. Marketers can further collect the right type of customers that fits the services and not the other way around. Prospects with other financial needs can be routed to more appropriate services you offer. Awareness of the customer journey Intent data helps financial institutions optimize and understand the customer journey and correctly map customer interactions. It enables to influence the end-to-end experience of the customer. By having a perfect understanding of where the customer stands in the customer journey, financial institutions can market their services according to their needs. Increased personalization Intent data allows the marketers to look further into the minds of their prospects. It enables them to read the customers as an open book while segmenting them on their thought process. For example, which customer is more savings-oriented? Which one is planning for their retirement? With these insights, marketers can match the right customers to their services with the relevant type of marketing to compel the audience. TYPES OF MARKETING SIGNAL AVAILABLE Signals are the hints prospects resonate, showing financial institutions they are ready for being potential customers. These signals are everyday actions like Googling stuff they need orLike hard searching online, clicking on financial institution ads, applying for any loans, and paying off debts. Financial institutions can use these signals to run highly specific marketing campaigns. Let’s look into these marketing signals further. Most marketing signal falls into three major categories, such as: Behavior-based The behavior-based marketing signal includes hard searching like credit inquiries and online searches that signal intent to look for services. It may also include some minor changes that indicate future requirements like a change of residence or buying intent of large purchases like automobiles and real estate. Event-based Event-based marketing signals include automobile lease expiring, mortgage rate settings, or child passing the high school. These are the hints that indicate the prospect is going to have a requirement for your services. These signs show that the customer is about to have a significant financial shift, and financial institutions can use this opportunity to market their services. Predictive Predictive signals are passive hints that prospects show. It may not be as obvious as behavior-based, but it can set a boundary to your targeted customers. Some of the predictive marketing signals could have data of savings, debit consolidation, and mortgage refining. Predictive marketing signal can give low fidelity and can assure you the maximum coverage of your marketing campaign. CONCLUSION Using signals to attract and retain consumers is an effective component of a well-thought-out marketing strategy. Moving to a signals-based strategy, on the other hand, does not have to be a huge overhaul of your current procedures. Continue to use your tried-and-true strategy, but experiment with new ways of analyzing and responding to signals. Worried about how much money you'll need to set aside to fund the signal-based marketing strategies? You can assess the ROI of the marketing strategy before expanding your program if you start with a scalable service with no commitments. Traditional signals continue to be relevant and form the basis for customer-focused marketing. Combining them with potentially powerful signals that indicate purchase intent will enable proactive communication and elevate financial marketing initiatives to the next level.

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3 Signs Fintech Is Entering the Mainstream

Article | February 26, 2020

Over the past several years, financial technology -- or fintech, for short -- started a revolution of sorts in what some consider a stodgy industry. Online-only banks with no branches, digital payment systems, and person-to-person (P2P) payment apps are just a few of the ways that technology is changing the way consumers handled their money. That hasn't gone unnoticed by some of the biggest names in the financial services industry, and rather than reinvent the wheel, some are spending hefty sums to acquire the talent and technology that sought to disrupt them in the first place.

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Spotlight

Bain Capital Ventures

Bain Capital Ventures partners with disruptive founders to accelerate their ideas to market. The firm invests from seed to growth in enterprise software, infrastructure software and industries being transformed by data. Bain Capital Ventures has helped launch and commercialize 200-plus companies since 2000, including investments in DocuSign, Jet.com, Kiva Systems, LinkedIn, Rapid7, SurveyMonkey, Taleo and TellApart.

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