According to research findings released by NTT DATA, there is ample opportunity for financial institutions to harness the power of AI to build more meaningful connections and experiences with customers — vastly improving both retention and acquisition. In the global study, customers provide striking testimony about what they would like their financial institutions to provide for them.
The information highlights that 53% of customers say they would like their financial institution (FI) to proactively send them reminders on upcoming major payments. In the same direction, 49% say they want their FI to anticipate products and services they might need or be interested in. Likewise, 47% of customers want them to connect the dots between their income, expenses, and savings providing proactive guidance to help them reach their financial goals. 46% would like their FI to act as a conscientious advisor (voice of reason) on major spending decisions. Finally, 39% of customers want their financial institutions to intervene and prevent purchases to help them stay on budget and reach their financial goals.
“Customer needs are changing, and so are the ways in which financial institutions need to interact with them,” said Wayne Busch, President Financial Services and Insurance, NTT DATA Services. “Advancements in artificial intelligence, machine learning, and data intelligence are giving banks vast capabilities to deliver what customers want — hyper-individualized, relevant and timely financial guidance to achieve their life ambitions.”
To meet these customer expectations, accurate, real-time data must be at the core of every customer interaction. Better data — and the ability to act on its insights through AI — enables FIs to anticipate customer needs, provide personalized financial counsel, improve data protection, automate manual transactions, and power proactive alerts.
“Futurists are the most important customer segment for financial institutions to understand as they pose a substantial opportunity for growth and customer retention,” said Kaz Nishihata, Executive Vice President, NTT DATA. “We believe over time that technological progress will turn the customer segment that today says they will not pay for personalized proactive services into Futurists.”
Attract and retain customers in a digital world
To explore how AI can enable FIs to attract and retain customers in a digital world, NTT DATA surveyed 4,807 consumers and 476 senior executives in banking, brokerage, capital markets, wealth management, and cards and payments across the U.S., UK, Germany, Spain, Italy, Japan, Brazil, and Mexico in December 2020.
Some of the key study findings include the top five reasons customers leave their financial institution centre around the price, access, and trust, highlighting high fees, poor customer service, data breach, unattractive savings and loan interest rates, and competitive offers. Precisely, trust is shown to be a fundamental value for customers. 66% of customers tell banks “be honest with me” – if you make a mistake, be honest with me about it, and correct it. On the same point, 59% say “deliver on your promises” – if you promise to deliver payment in two days, make sure I can access the funds in two days. If you promise to protect my data, do not fail.
In this sense, age also plays an important role in this type of decision. Gen X and Millennials are willing to pay more to receive personalized recommendations to improve their financial well-being. 35% of survey respondents are willing to pay for and share personal data for personalized proactive services. These “futurists” have higher incomes, have many banking relationships, are extremely comfortable using technology, and prefer using digital products and services. Additionally, 66% of “futurists” agree personalized proactive services are an important feature for their primary bank to offer.
Regarding personal data, customers are willing to share it in exchange for personalized proactive services. 61% of consumers are motivated to let go of their reservations around privacy and security in exchange for managing their individual spending budget and getting online individual advice to save money. For that reason, 41% say they would share online retail purchases, 37% geo location details, 36% airline programs information and 36% would share credit card information.
To download a copy of NTT DATA’s research report, “Get Personal: Banking on AI to Help Customers Reach Their Hopes and Dreams,” click here