YOUNGSTOWN, Ohio – Data reigns supreme in banks, and financial institutions use it to improve efficiency and boost businesses.
Automation and artificial intelligence allow banks and credit unions to tap into mountains of data to identify consumer habits. What is purchased, how it is paid – debit card, cash or app – and whether it was purchased in a store or online are tracked to give banks a better perspective.
âThese are the kinds of things we’re looking for,â says Melissa Maki, vice president / director of marketing communications at The Middlefield Banking Co. âAnd it reveals these little gems, these little nuggets of things that we may know to look for in providing services to our customers.
The idea is to use this information to personalize the banking experience, for example by installing more interactive kiosks or by recommending loan products to individuals.
For example, if a customer uses a home equity line for home renovations and the bank notices that their customer has little availability but has a low loan-to-value ratio, the bank may recommend a direct installment loan, explains Vincent Delie. Jr., President, President and CEO of FNB Corp. and First National Bank of Pennsylvania.
âWe can use artificial intelligence to identify customers and see what they’re doing – and we can get back to them and present them with another opportunity,â says Delie. âWe use it to help create leads within the company to drive product sales or product recommendations for changes. “
Banks have been building this data for years as customers turn to online and mobile banking. As the pandemic accelerated this shift, banks strengthened their automation infrastructure to bolster these efforts and roll out new products.
FNB is building a data hub to process large volumes of data from disparate applications under its umbrella. To this end, FNB has hired several people with extensive expertise, says Delie.
Likewise, 717 Credit Union compiles the data it has accumulated over the years, both digital and on paper, for input into a centralized transaction processing system, says Brian Boettcher, senior vice president for innovation and information technology.
Every transaction will go through the digital core processing system, which is expected to be completed by the end of 2022 or early 2023, he said.
âIt will be a great catalyst for business intelligence, data management and the digital space, because it will be a digital system,â says Boettcher.
However, true artificial intelligence does not yet exist, says Boettcher. What is currently available is more business intelligence – data collected and applied to machine learning solutions to improve internal efficiency.
Customers who call 717 teleservices first speak to a machine that learns speech patterns from hundreds of calls. If a member’s request is for a balance update, the system will identify the member when they call and provide a balance update without being prompted, improving overall customer engagement.
âUsing AI to effectively answer the member’s question without having to speak to a human is faster,â says Boettcher. âAnd that frees our people up to handle the most complex matters so we don’t have people waiting in line. “
Do more with screens
As more customers turn to mobile options for just about everything, banks and other financial institutions are moving more products and services to these platforms.
The upgraded infrastructure will enable end-to-end digital loan origination and document signing via mobile devices.
FNB recently introduced a mobile eStore, which allows users to perform routine transactions, purchase products and services, view credit scores and schedule virtual sessions with bankers, explains Delie.
In 2022, FNB will introduce interactive eStore kiosks at its branches as part of its Clicks-to-Bricks initiative.
âYou have all of your products and services listed on the online store, and the customer can come in, choose a checking account and a loan product, put them in the cart, and go to checkout,â he says.
The FNB saw a 40% increase in mobile banking services from the first quarter of 2020 to the same period this year, as well as another 29% increase in online banking, Delie said.
Likewise, Middlefield Bank has seen its consumer level clients turn to online options in recent years. Since the start of the pandemic, business customers have gone 76% to online or mobile banking tools or both, said Michael Allen, executive vice president and chief banking officer.
Middlefield will soon introduce a consumer solution for opening online deposit accounts with another option for small businesses a few months later.
In the first quarter of 2022, the company will add online loan applications and the ability to digitally submit supporting documents, he said.
Additionally, financial institutions are implementing more interactive ATMs, or ITMs, that allow users to transact with cashiers by video in a drive-thru rather than entering a branch.
717 has more than 30 such machines in service in its service area, Boettcher says.
At the same time, traditional ATMs are regaining popularity in the Mahoning Valley; 717 saw their ATM transactions increase by 7.9% this year compared to 2020, he says. âIt will be a record year for a significant amount,â he said.
Farmers National Bank has four ITMs in its lab branch on U.S. Route 224 in Boardman and will deploy 10 over the next three months, including those in Canton and at the intersection of 224 and Market Street, its manager said. information, Brian Jackson.
More Farmers customers are adopting mobile as well, he says, and the company is exploring new solutions, including a peer-to-peer payment option, as well as the ability to ‘turn off’ debit cards and track. debit activities via a mobile application.
Farmers is also looking to extend its mobile solutions to its business customers, Jackson continues.
âWith business customers, it definitely gets more complicated because they’re doing more complex transactions,â he says. âYou have to be able to secure these transactions. We go through a huge verification process and we test these apps extensively. “
While the pandemic has led to the development of mobile solutions, it has also brought “an incredible amount of fraud,” said Allen of Middlefield.
âWe had to strengthen the solutions we had,â he says. âWe already had solutions. But we have improved these solutions by using what is called reverse positive compensation.
Many banks have adopted reverse positive payment solutions, which mitigate fraud by detecting fraudulent, altered or counterfeit checks by allowing customers to examine yesterday’s checks that have been presented for payment.
âThis gives the business owner the control necessary to stop payments in place when they discover potentially fraudulent activity,â says Ryan Spisak, PNC’s corporate banking market manager.
Banks have also embraced Zelle, a digital payments network, as a way to allow consumers and business customers to send money securely online without having to share checking account and bank routing numbers.
Such tools address the growing need for consumers to send money to friends, while businesses can also use them to pay vendors in real time, Spisak explains.
PNC offers several payment and billing tools.
âEfficiency is important because it provides them with another method to transfer funds electronically rather than writing a check,â he says. âIt gives them more control. “
Prior to 2020, more than 60% of all payments to U.S. businesses were made by physical check, notes Shannon Mortland, vice president of regional media relations for PNC.
But since March 2020, the conversion to real-time electronic payments âhas been amazing,â she says.
The future of brick and mortar branches
While there is a transition to mobile, Allen of Middlefield believes there will still be a need for physical branches and personal banking services.
âThe customer wants to see the branch. They want to be able to drive past the branch and know that’s where their money is, âhe says. âBut their need to interact with the branch will continue to diminish over time. “
This could lead to smaller physical branches, notes Farmers’ Jackson. A branch office footprint could probably be reduced to 1,800 to 2,000 square feet and have more virtual ITMs, much like the Farmers Lab branch.
717 recently opened a branch in downtown Warren that is 1,500 square feet – notably smaller than other branches.
What won’t change, says Boettcher, is the need for people. âWe are discussing how we can make people better at what they do. And automation, artificial intelligence, business intelligence allow us to do it, âhe says.
Above: 717 Credit Union Vice President Remote Delivery Experience Sherri Ramsey and Brian Boettcher, Senior Vice President of Innovation and Information Technology, with one of the Credit Union ITMs.
Copyright 2021 The Business Journal, Youngstown, Ohio.