How to accelerate bank deposit growth by balancing AI and human expertise

Deposit growth has emerged as a top priority for financial institutions. A recent survey revealed that 4 out of 5 bankers have identified deposit growth and the need to attract deposits as primary concerns, highlighting the urgency for banks to optimize their deposit processes.

However, they’re faced with challenges. With customers increasingly shifting their funds to high-yield accounts and the rise of fintech companies offering digital banking solutions, traditional banks are under pressure to adapt their strategies to meet evolving customer expectations. As a result, banks are turning to advanced technologies like artificial intelligence (AI) to streamline workflows and identify new deposit opportunities.

In this blog post, we’ll explore the role of AI in deposit growth, examining how it enables banks to navigate these challenges and capitalize on emerging opportunities. We’ll also discuss the importance of human intervention in maintaining customer trust and enhancing the overall banking experience, highlighting the need for a balanced approach that leverages both technology and human expertise.

Understanding the banking industry landscape

The banking industry is undergoing significant changes, driven by shifting consumer behavior, advances in technology, and evolving regulatory requirements. As a result, financial institutions are facing increased competition for deposits, making it essential to understand the current landscape and adapt strategies to attract and retain deposit customers. The rise of digital banking and mobile banking apps has transformed the way customers interact with their banks, making it crucial for financial institutions to invest in these channels to remain competitive.

In addition, the banking industry is experiencing a shift towards more personalized and customer-centric approaches, with a focus on building long-term relationships and providing tailored financial solutions. This requires financial institutions to have a deep understanding of their customers’ needs, preferences, and behaviors, and to develop strategies that cater to these requirements.

Challenges faced by financial institutions in optimizing deposit processes

People are moving their money away from commercial banks in favor of high-yield accounts. Of bank customers surveyed, 29% said they moved deposits away from their primary banking institution in the past 90 days.

Adding to this challenge is the increasing competition. Fintech companies and direct banks (digital-only banks) are changing the game, offering digital service offerings modern customers want. The Fintech sector is expected to reach $1.5 trillion in annual revenue by 2030, making up nearly a quarter of global banking values.

In response, banks are reevaluating their strategies. They need to bring their technology up to speed to meet rising customer expectations, while maintaining the human guidance that their very foundation was laid upon. Striking this balance will be key to deposit growth.

The role of AI in deposit growth

An AI-enabled customer experience has been proven to yield significant benefits:

• 10% boost in revenue

• 20% increase in customer satisfaction

• 60% reduced effort in audience selection

• 13% decrease in operational costs

Within the banking sector, AI serves as a vital catalyst for deposit growth. By simplifying deposit workflows and identifying lucrative opportunities, AI enables banks to streamline processes and capitalize on valuable prospects. AI also helps in creating personalized experiences for existing customers, thereby enhancing customer loyalty and satisfaction.

Streamlining deposit workflows

AI is transforming how bank deposits and deposit workflows are managed. AI systems use advanced algorithms to analyze data quickly and accurately, automating tasks like transaction processing and fraud detection.

By identifying patterns, trends, and anomalies in deposit transactions, AI enables banks to detect potential issues early on, mitigating risks and ensuring regulatory compliance while delivering a seamless customer experience.

Identifying retail deposit opportunities

AI-powered data analytics also help banks identify deposit opportunities that may otherwise go unnoticed. By analyzing customer behavior, financial trends, and market dynamics, AI algorithms can pinpoint potential depositors, assess their preferences and needs, and tailor personalized offerings to attract and retain them. By analyzing customer behavior, financial trends, and market dynamics, AI algorithms can pinpoint potential depositors, including those interested in retail deposits.

And through predictive analytics and customer segmentation, banks can target specific demographic groups with tailored marketing campaigns, incentivizing deposit acquisition and fostering long-term customer relationships.

Strategies for deposit growth

To achieve deposit growth, financial institutions can employ a range of strategies that focus on attracting and retaining deposit customers. One effective approach is to offer competitive interest rates and fees, while also providing a range of deposit products that cater to different customer needs, such as money market accounts, savings accounts, and certificates of deposit (CDs).

Another key strategy is to invest in digital banking and mobile banking apps, which can provide customers with convenient and secure access to their accounts, as well as a range of online banking services. This can help to attract tech-savvy customers who value the convenience and flexibility of digital banking.

Financial institutions can also focus on building strong relationships with their customers, through personalized service and tailored financial solutions. This can help to build customer loyalty and retention, which is critical for achieving deposit growth.

The importance of human intervention

While AI undoubtedly plays a significant role in streamlining deposit workflows and identifying opportunities, human intervention remains crucial for fostering trust and rapport with customers.

Despite advancements in technology, customers still value personalized interactions and human touchpoints, especially when it comes to financial matters like depositing funds. Similar to credit unions, banks must leverage human touchpoints to build and maintain strong customer relationships.

Humans possess the empathy and understanding needed to address customer concerns, answer complex queries, and provide tailored advice based on individual circumstances.

Human intervention also adds a layer of accountability and reassurance, particularly in situations requiring delicate decision-making or resolving issues that AI algorithms may struggle to handle effectively.

Balancing AI and human guidance

AI and analytics can give us context. But they can’t be human. Using the insights and context they provide, banks can connect their people to their customers and prospects at the right moments. And arm them with the right information. This provides a better experience for both the customer and the banking associate.

Today’s top banks are driving customer loyalty by personalizing digital banking experiences. Making a large deposit or opening a new account can be stressful, and it’s a key opportunity for human intervention. Customers often wonder if they did it right, or if their money just disappeared. Encouraging customers to perform more transactions with the same bank can enhance their overall experience and loyalty.

Through Guided CX, a friendly financial expert can serve as a trusted advisor, easing their anxieties and helping them feel good about their financial decisions.

The results speak for themselves:

• Glance Guided CX is proven to increase transactions

• A top US bank boasts a 97% customer satisfaction when using our cobrowse feature

• Glance reduces sign-up times for new product by 60%

Measuring success and refining strategies

To measure the success of deposit growth strategies, financial institutions can use a range of metrics, including deposit balances, customer acquisition rates, and customer retention rates. These metrics can provide valuable insights into the effectiveness of different strategies and help to identify areas for improvement.

Refining strategies involves continuously monitoring and evaluating the performance of deposit growth initiatives, and making adjustments as needed. This can involve gathering feedback from customers, analyzing market trends and competitor activity, and identifying opportunities to innovate and improve deposit products and services.

By regularly reviewing and refining their deposit growth strategies, financial institutions can stay ahead of the competition and achieve their deposit growth goals. This requires a commitment to ongoing innovation and improvement, as well as a deep understanding of the banking industry landscape and the needs and preferences of deposit customers.

Where we go from here in digital banking

As we look to the future, leveraging insights from AI and analytics while empowering banking associates with the right tools and information will be essential in delivering exceptional digital banking experiences and ensuring customer success. Future strategies will also need to consider the influence of central bank policies on interest rates and deposit growth.