Financial institutions today have easy access to programs that empower them to predict the financial needs of their mobile bank account holders, but surprisingly few take advantage of these tools. Despite having access to enormous amounts of data about the interests, habits, desires and behaviors of their account holders, most financial institutions struggle with leveraging this information to grow and retain their base.
One way to leverage the data you have about your account holders spending (or saving) habits and financial tendencies is to use predictive product recommendations. Think of it like your own Netflix or Tik Tok algorithm for your account holders that provides personalized services that better serve them.
Here’s how predictive product recommendations work:
• They leverage the digital banking information you already have. You have a lot of information about your account holders. You know who they are, how old they are, and what they do. You also have transaction data that shows how they spend their money. That data can tell you whether they have kids, if they like to travel, or if they're saving for retirement. AI programs can use this information to determine what products and services they are most likely to use.
• They use algorithms to connect behavior, data and geo-locations to make recommendations. Modern AI algorithms can take your account holder data and build robust models to equip your product development teams. These programs use your information to build a profile of each account, identifying what they need and want. Once they know who your account holders and prospects are, you will know what products to offer to them.
What does this mean in the real world? Here’s an example. Database analysis tells you that married account holders in a certain age range likely want to save for their children's educations. You can target those account holders with information about 529 accounts and other products directed toward education savings. Similarly, account holders who have recently taken on a mortgage will probably be making some major purchases for that new home. You can use that data and existing relationships you have with the community (say, the local hardware depot, nursery or furniture store) to help them find the products they want to purchase. Meanwhile, you can also use that same information to offer an increased credit card limit to make those additional purchases.
Begin by getting to know your account holders. Every day, with every transaction your account holders make, your financial institution gains just a bit more information about them. Use that data to stay one step ahead in your awareness of their needs.
• Be aware of spending habits. When someone opens a mobile bank account with your financial institution, they tell you a lot about themselves. This isn't just financial information; it often includes personal information that helps you to know more about them. Then, as they use their accounts and other financial products, you find out more about them every day. Do they buy baby food? Are they spending on school or college tuition? Are they building retirement savings? Do they spend significant money on travel? All of this information allows your financial institution to group your account holders into age or demographic clusters.
• Create solutions for interest clusters. Once your account holders are grouped by age or other demographics, you can target your relevant offers more effectively. Remote check deposit, electronic banking, or credit score reports are examples of services that different account holders may be seeking.
• Make tailored life stage offers. Your account holders' age also provides a useful tool for tailoring your offers. Younger people are often facing all the expenses of raising children or paying off a home. Older account holders focused on retirement planning may be looking for new and clever ways to save. Account holders who are already retired will be looking for products and services to help them with using their retirement assets wisely and carefully.
• Partner with trusted platforms for leverage. It isn't always possible or even desirable to try to develop products for this new understanding of your account holders on your own. Instead, look for trusted potential financial partners who have already developed the software you need to develop a robust targeted predictive advertising program.
Much like Netflix’s predictive recommendations, Larky nudge® enables you to proactively reach account holders with lock screen push notifications before they log into your mobile banking app or visit a local branch. Create better relationships by optimizing your messaging to the products and services your account holders want and need now based on previous spending habits and user data. Contact us to learn more or schedule a demo to see it in action for yourself!