The use of AI by financial institutions ranks at the bottom of all industries according to an Accenture study. This is unfortunate since AI usage can help uncover the drivers of key performance measures such as revenue and profit, along with helping to propel innovation in products, services, processes, and customer service. Factors for success with AI initiatives include hiring external AI talent, investing in software with embedded AI, willingness to experiment widely and ‘fail fast’, and having an AI implementations leader.
Failing to deliver on customer digital transformation expectations can cost a company business. Many financial institutions have struggled to achieve meaningful transformation results due to legacy technology and manual processes from a paper-based world. But often the most significant reason these efforts fail is related to people. It’s not just about bringing in data scientists and technologists but equipping all staff with whatever knowledge they need about the new technology in order to do their jobs better.
App store ratings can provide valuable insights into customer interests and pain points. Based on an analysis of reviews, key app capabilities include ease of use, biometric logins, personalized financial recommendations, push notifications, and virtual assistants and chatbots.
Pushing products won’t differentiate your bank – solving problems will. And this approach is particularly effective when focused on specific micro-segments of the customer base. An approach to identifying these micro-niche opportunities starts with identifying opportunities that may stem from longer-term business objectives. Next pull in customer data related to each opportunity. From there try to identify specific moments that will trigger customers to take action, and build a marketing strategy around taking advantage of those.
Core system modernization is the elephant in the room that no one likes to discuss. But the fact remains that banks and credit unions need efficient, cloud-based, real-time core systems to remain competitive. There are several approaches to this, including making it a ‘Big Bang’ do-it-all-at-once project, a ‘run off’ strategy that slowly moves product lines to a new system over time, and standing up a virtual bank on a separate core and migrating the traditional bank over at some future point, perhaps in stages.
Women have long struggled for C-suite representation in the financial services industry. According to a recent McKinsey & Company report, women make up more than half of the entry-level banking workforce but less than a third at the senior vice president level and above. TD Bank has taken a leading role in addressing this issue through its Women in Leadership program which offers mentoring, skills training, and a ‘Career Relaunch’ program for women re-entering the workforce.
‘Tokenized Deposits’ are a concept distinct from stablecoins. Instead, they point to existing bank deposits held at an insured depository institution that can be referenced for payment settlement using blockchain technology. The USDF Consortium also envisions enabling other features such as self-executing, self-enforcing ‘smart contracts’ using those same blockchain-based rails. The Consortium’s view is that since tokenized deposits are just digital representations of existing financial institution liabilities, they should not be subject to proposed regulations regarding stablecoins and other virtual currencies.
