Artificial intelligence (AI) is quickly becoming an essential tool in the banking industry, as the demand for personalisation is spiking. Revealing how impactful AI can really be in meeting this demand, CleverTap, the all-in-one engagement platform explored the tech’s use in the global banking landscape.
In its research, titled Banking on AI: A Leader’s Guide to Customer Engagement Excellence in Banking, CleverTap uncovered how AI can be leveraged to address modern banking challenges. This includes the need for personalised and secure digital experiences amid rapid digital transformation. The report also highlighted key trends for banks in customer engagement within the AI space, while understanding the challenges and opportunities faced by banking leaders.
CleverTap surveyed 50 senior executives in India’s banking sector, with companies across the globe, and found that 57 per cent are facing significant challenges with data silos, meaning they cannot format unified customer view. This comes as a result of technological barriers and cost constraints.
Furthermore, it found three out of four banking executives may be missing out on critical opportunities to build customer loyalty and drive sustainable growth, as they focus heavily on short-term revenue targets. To effectively balance short-term metrics with long-term financial outcomes, banks need to harness advanced analytics that not only track current performance but also predict future customer behaviours.
CleverTap’s Core Four Framework
One solution to tackle this problem is provided by CleverTap as it has developed a framework that can serve as a foundation to improve customer experiences and drive long-term value.
CleverTap’s Core Four Framework – encompassing Trust, Technology, Touchpoints, and Transactions – is designed to help banks transition from product-focused to customer-centric approaches, cultivating deeper relationships and delivering phy-gital experiences. The research covers the nuances for retail banks, neo-banks, and specialised banks, providing insights across the four core pillars.
Key gaps identified basis of the framework include:
- Loyal customers generate 2.5x higher transaction value than others, and referred prospects are 3.5x more likely to onboard. However, 50 per cent of banking executives do not effectively leverage their high-NPS (Net Promoter Score) customers.
- Fifty-seven per cent of banking executives have yet to implement a unified customer view, suggesting issues with data silos. The primary obstacles to unification are technological challenges and associated costs.
- Forty-one per cent of banking executives are not using real-time segmentation capabilities, limiting their ability to deliver timely and personalised communication
- Banks using more than four channels in their engagement campaigns see a 53 per cent improvement in conversions compared to those using fewer than four channels, yet only about 33 per cent of banks have adopted this approach.
This approach consists of three key stages:
- Operational optimisers focus on using AI to enhance operational efficiency through the automation of routine tasks and improved workflow processes.
- Personalisation and experimentation architects where AI is applied to improve orchestration while personalising interactions and conducting experiments at scale to boost conversion.
- Strategic innovators showcase the use of AI for automating strategic decision-making and providing deeper insights for long-term planning.
Bridging the gaps in customer experience and operational efficiency
Commenting on the report, Jacob Joseph, VP – data science, CleverTap said: “The banking sector has often played catch-up when it comes to tech innovations, but customer familiarity with digital solutions is making it clear that banks need to bridge this divide quickly.
“The banking sector often remains a ‘follower’ in tech adoption. This cautious stance means banks typically wait for proof of concept before fully embracing new technologies.
“Our latest report dives into how AI can bridge the current gaps in customer experience and operational efficiency, helping banks not only meet evolving customer expectations but exceed them. By deploying integrated, AI-powered solutions, banks can deliver the hyper-personalised experiences today’s customers expect, building lasting trust and loyalty. For banks aiming to stay competitive in a digital-first world, AI isn’t optional – it’s essential.”
Looking to the future
Looking ahead at the future of the banking sector with AI, CleverTap’s latest insights highlight six transformative AI outlooks that are poised to redefine customer engagement and operations:
- Customer engagement for banking is driven by innovations like synthetic data, which enhances analytics without compromising privacy.
- Banks are also prioritising emotional engagement, using AI to create immersive experiences and personalised gamification that fosters customer loyalty.
- Modernising MarTech through AI-powered ecosystems allows banks to integrate data and services seamlessly, enhancing customer experiences.
- A shift towards a customer-centric approach, leveraging AI for dynamic personalisation, further strengthens relationships and retention.
- Additionally, implementing responsible AI frameworks builds trust by ensuring transparency and compliance.
- Finally, the collaboration with fintech firms through AI-powered open banking creates holistic financial ecosystems, offering a wider range of services and real-time insights to customers, thereby increasing trust and engagement.