Redefining customer engagement in financial services
Thanks to GenAI automation and hyper-personalization are no distant future any more
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Since the launch of ChatGPT in November 2022 the world hasn’t stopped marveling at the potency of Generative Artificial Intelligence. Equally impressive is the speed with which companies are benefitting from it. Only one and a half years later we have numerous case studies that demonstrate that deploying AI can significantly boost marketing KPIs and save overhead.
Last month we looked at some representative case studies. Klarna’s AI solution can do the work of 700 full-time customer service agents. The Commonwealth Bank of Australia uses AI in its onboarding and KYC process to produce payments ten times faster. E-mail personalization and speech analytic tools are yielding splendid conversion improvements.
Yet these results are nothing compared to the longer-term potential that GenAI can have on the marketing of financial services. It will be truly transformational to the way companies interact with their customers in two major ways: First, through an unprecedented wave of marketing automation. Second, through hyper-personalization of all four P’s of the marketing mix (i.e. product, price, place, and promotion).
Content-creation and customer service on autopilot
Generative AI offers marketeers a powerful tool to slash costs and boost efficiency. Chatbots and virtual assistants will be able to render the majority of customer service staff redundant while not compromising on customer satisfaction. On the contrary: The improved speed is often credited with increased customer satisfaction.
The second key area is content creation. AI can generate different formats of marketing materials instantaneously and almost for free – from social media posts and ad copy to product descriptions and website imagery. This frees up marketers' time from repetitive tasks, allowing them to focus on strategy and creative direction.
It also eliminates bottlenecks. With each modification of an ad, text, or image the complexity grows exponentially. Larger campaigns that address multiple customer segments thus often push marketing departments to their limits. Even when companies employ marketing agencies, there is a limit on how many variations can be produced. And agencies mean additional costs.
Hyper-personalized content creation
Generative AI is re-defining customer engagement. Marketing assets can be created at almost zero costs. What this means in further consequence is that the classic segmentation with which companies approached their customers and prospects will eventually yield to an era of hyper-personalization, data-driven decision-making, and enhanced customer experiences.
Texts, images, audios, and even videos can be generated on the spot and automatically. In theory, this would allow each customer to receive dynamic messaging. These can be things such as personalized product description for a credit card the customer clicks on, a video with his or her name in it, or images in an Instagram ad soaked in their favorite colors.
Deployment of GenAI enables dynamic website content. It can personalize the content based on user behavior and demographics. Imagine a website that automatically adjusts product information and investment recommendations depending on a user's age, income, and investment experience.
Thanks to GenAI banks are also able to generate blog posts and articles tailored to specific customer segments or even better: one specific customer. Bringing down the costs of marketing asset creation close to zero means we finally have the possibility to truly have a 1:1 relation with each customer. AI could create content about saving for retirement for young professionals or write investment guides targeted towards risk-averse individuals.
Or they could benefit from personalized marketing e-mails. Forget generic email blasts. GenAI can craft email campaigns with personalized greetings, relevant financial product suggestions, and educational content aligned with individual customer profiles.
Financial services are no longer a one-size-fits-all proposition. Customers expect personalized experiences that cater to their unique financial goals, credit-worthiness, and risk tolerance. GenAI excels in this domain, generating tailored content that resonates with individual needs.
Combining GenAI with quantitative AI
This level of personalization fosters deeper customer engagement, leading to higher conversion rates and improved brand loyalty. But it can only be truly achieved if the generative capacities of AI are combined with the quantitative ones. Only by having large pools of past and present behavioral data and analyzing them continuously can we accurately predict customer preferences and match them with the right marketing assets.
The combination with quantitative elements is important for another reason: measuring performance. With quantitative AI methods we can do a better ROI analysis, a better campaign optimization, and eventually it will also help marketing heads convince CEOs and boards to approve higher budgets because they can exactly show how many dollars came into the marketing machine and how many came out.
Such campaign performance analyses and improvements happen in real-time. They provide live insights into customer engagement, click-through rates, and conversion rates. This allows banks to identify what's working and adjust campaigns on the fly for maximum effectiveness.
Combining those two strands of AI allows for data-driven marketing analysis and optimization, so financial service providers can ensure their marketing efforts are targeted, effective, and delivering a measurable return on investment. However, this is easier said than done as it requires huge IT-projects that touch upon most of your systems, often even involving core banking systems that are inflexible and can easily break.
Prepare yourself and your company for the coming AI age
The more you dive into AI applications, the clearer it becomes that it will be a truly disruptive force in all marketing disciplines, whether that be campaign management, product management, digital customer acquisition, PR, customer service, sales, or business development. Though automation will alter the way strategies are drafted and marketing assets generated, the need for good marketing talent that knows how to deploy those new tools will be stronger than ever. Think of it like this: GenAI will be for marketeers what MS Excel is for accountants.
But make no mistake about it: Mastering GenAI is more than just typing prompts into ChatGPT or Google’s Gemini. Using those tools without customization, without an understanding of prompt engineering, and without a deep expertise in your marketing field will make your communication sound and look bland. And using AI without a robust process will make you walk right into problems with data security, privacy, bias, regulation, information accuracy, and much more.
Because of the tremendous potential and risk of GenAI for financial services marketeers, I have teamed up with the Centre for Finance, Technology, and Entrepreneurship (CFTE) to create a certified online program for marketing experts and managers on all levels. Learn how to use AI in market research, content creation, and to drive a successful campaign even by deploying free tools. Also find out about successful case studies, possible use cases, and how to set up an AI strategy within your team.
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