Advancements in AI & ML Make Once Elusive Technology Accessible to Community FIs

On July 20, former executive chairman of Amazon and the world’s wealthiest man, Jeffrey Bezos, reached the edge of outer space with a diverse and high-paying crew that ranged from the youngest to the oldest individuals to ever visit space. The cosmic mission, called Blue Origin, was a self-funded project that Bezos and expert technicians developed for over 20 years.

Less than 10 days before Bezos’ historic trip, another billionaire, Richard Branson, accomplished a similar feat, reaching the outskirts of Earth’s atmosphere on his own self-funded space mission, Virgin Galactic. The stars continue to be the final frontier where technology and man are pushed to their limits.

The emergence of individuals and private corporations building their own space missions exhibits the evolution of technology and how far more accessible (albeit to the wealthiest individuals) and obtainable space travel is after more than half a century of its creation and improvement.

Space industry expert and advocate, Robert Jacobson, explained that space exploration has “the ability to produce a triple bottom line, or ROIII: Return on Investment, Innovation and Inspiration.”

Although advancements in digital technology in the marketing industry are a far cry from the literally astronomical achievements of space travel, their wide impact on the industry cannot be understated.

Investments in sophisticated marketing technology and pushing the envelope of what your AI-based ad campaigns can accomplish are likely to bring about an impressive return on investment. Institutions that choose to make the leap to relying on artificial intelligence in marketing tech often see an ROI of four to 10 times their investment. Previously reserved for organizations in the “billionaire class,” emerging digital marketing technology has a different focus – making that sophistication and automation accessible to businesses and organizations of all sizes. Given the results that are being demonstrated by the financial institutions that have made the leap, community banks and credit unions today should seriously consider utilizing the cutting edge digital marketing technology that major banks have been using for years. In the modern hyper-competitive environment, they should also consider what it means to their growth if they choose not to take this step.

For years, major financial institutions have had the luxury of being able to spend copious amounts of funds on technological advancements that smaller banks and credit unions simply cannot afford. In 2019, according to Forbes, JP Morgan and Bank of America spent more than $10 billion on technology alone.

While most smaller community institutions aren’t equipped to invest in that level of development, what they can do today is partner with fintech organizations that offer such solutions, which are way more accessible and affordable than ever before. This enables community institutions to compete on a more level playing field in an industry that has been dominated by the mega-FIs. It would not be wrong to say that there are no more reasons (excuses?) left not to make these types of crucial technology investments. If community banks and credit unions choose not to invest, they are opening their banking consumers up to make choices too – for products and services from other financial institutions, i.e. those that do make these investments and achieve high returns.

In the past decade, AI and machine learning (ML) have become far more prevalent and crucial to understanding data and strategizing future marketing plans. According to an article from the Harvard Business Review, three of the top five main objectives of companies that implemented AI were marketing related. AI-based predictive campaigns allow financial institutions to present the most meaningful and welcomed offers to individual account holders with virtually no effort.

By utilizing a predictive model to target specific audiences with the highest propensity to purchase particular products, financial institutions can effortlessly yet more accurately calculate the likelihood that individual customers and members will open specific accounts. Predictive modeling empowers financial institutions to run significantly more effective and successful marketing campaigns, all without increasing staff.

AI- and M- based predictive campaigns utilize years of demographic and campaign insights, and automate this process to provide clues about the consumers’ behavior, and therefore, their likelihood of buying a given product, all of which optimizes the bank or credit union’s messaging to each individual customer or member with very little effort. Such technology monitors, adjusts and optimizes the campaigns on an ongoing basis using updated ML models, increasing the likelihood that the institution’s campaigns are effective and successful.

It was not that long ago that these strategies, tactics and technology were reserved for a special class of very large financial institutions. What made the Bezos and Branson space journeys special was not the technology to travel to space. NASA accomplished that over 60 years ago.  What made it interesting was the ability for private individuals (albeit billionaires!) to accomplish what only the largest country-superpowers were previously able to do. And really, this is on the path to make it accessible to the (lower!) class of multi-millionaires next and so on, until it is ultimately available to the common man. Given the rapid pace of space investments and technology development, this is on the horizon and conceivably within the lifespans of many.

Similarly, these advanced digital marketing innovations with their automation and in-built intelligence enable financial institutions of all sizes to use techniques and insights previously reserved for only the largest institutions. Combined with rich performance analytics, they provide financial institutions with a complete digital marketing lifecycle implementation, truly turning marketing departments into profit centers. Therefore, it would be ill-advised and imprudent not to seriously evaluate and consider adopting this now-accessible technology. The AI/ML advancements built on earlier innovations that used business intelligence for targeted and smart campaigns are already leading to high ROI and growth for many financial institutions.

Sure, digital marketing technology is not the same as space technology – it’s not as mystical or esoteric certainly. But make no mistake, allowing for sophisticated advancements that leverage AI and ML accessible to community financial institutions is a big leap in leveling the playing field in financial services. There is no question that numerous financial institutions will be taking advantage of this access. And that’s what progress will look like.

Preetha Pulusani is the CEO of DeepTarget, a Hunstville, Ala.-based fintech that develops and deploys a customer engagement and cross-selling platform for credit unions and banks.