AI Case Study: Digital Onboarding

This is an excerpt from FinAncIal: Helping Financial Executives Prepare for an Artificial World. Grab your copy here!

This case study covers the leading player in AI-based digital onboarding for credit union members, Digital Onboarding.

Stay tuned to the CU 2.0 blog while we feature more excerpts from our financial guide to AI!

Financial institutions spend an average minimum of $350–400 to acquire each account holder. But that’s just the first step. It costs even more money to market various products and services to existing members or customers. It would be a shame to lose those accounts after such substantial investments.

So, how do you ensure that the people who’ve chosen your financial institution stay with you? How do you make sure the loan you’ve given them doesn’t move to another organization? If you’ve issued someone a credit card, how do you make certain that they’ll continue to use it?

Artificial Narrow Intelligence offers better results and measurable improvements when it comes to keeping the business that you worked for….

 

Introducing Digital Onboarding

25–40% of new accounts leave their financial institution within a year. As tempting as it is to assign blame, it might not be the best use of anyone’s time. The statistic speaks for itself: new account holders don’t always fully commit to their financial institution right off the bat.

The credit union-specific digital onboarding platform from Digital Onboarding, Inc. increases member retention by maximizing engagement in the days (and months) following the opening of a first account. The platform triggers email and SMS reminders that link to personalized, step-by-step digital guides that introduce new members to relevant products and account-related services.

After investing to bring in new accounts, credit unions stand to lose a lot of money from churn. Members who leave quickly—or worse, open a checking account and never use it—hurt the credit union’s income statement. Engaging members from the start results in longer, more profitable, and more satisfying relationships.

 

How the Digital Onboarding Platform Works

The Digital Onboarding platform motivates new credit union members to learn about and enroll in account-related services such as online and mobile banking, direct deposits, and bill pay. It also encourages adoption of other relevant products such as credit cards, auto loans, CDs, and high-yield savings accounts.

In the financial world, people who open only checking accounts tend to have higher attrition rates than people who open both checking and savings accounts. The more accounts, products, and services they use, the less likely they are to leave. People who join institutions for low auto loan rates don’t often investigate the other available benefits or opportunities. By creating greater engagement with the credit union, the Digital Onboarding platform increases the likelihood that new members will be satisfied and stick around for the long haul.

Like every company in this book, Digital Onboarding, Inc. will use AI to accomplish its goals. The company plans to use machine learning two ways: tactically and strategically (for targeting).

For strategic targeting, Digital Onboarding, Inc. encourages credit unions to use its platform to automatically identify the best members for a particular product, service, or other offer.

The platform’s machine learning capability will help credit unions automatically identify:

  • Which members qualify for specific products and account-related services;
  • Which members are most likely to need particular products or services;
  • Which accounts are at risk of closing (so the credit union can re-engage them before it’s too late).

The platform’s automated, AI-based targeting personalizes marketing messaging. It also helps new and less-engaged members explore relevant products and services at their credit union.

Tactically, the Digital Onboarding platform automatically identifies and suggests optimal outreach strategies. It finds the best days and hours to send SMS and email reminders. Typically, those tactical decisions are made by people. Their decisions are supposedly based on reason, but usually they’re arbitrary. Machine learning analyzes data more quickly and accurately than humans, which allows it to quickly identify the best times and methods of outreach, which leads to higher engagement, cross selling opportunities, and service enrollment.

Using a neural network requires a massive amount of data to effectively do anything. So, where does Digital Onboarding, Inc. get that data?

Digital Onboarding, Inc. developed an efficient, collaborative solution: because most credit unions don’t have the volume of data needed to make accurate predictions, the platform shares insights across financial institutions without compromising confidentiality. Thus, the Digital Onboarding platform can leverage data from Credit Union A for Community Bank B, and vice versa, since most institutions have the same objectives (cross selling a particular product or motivating a member to enroll in a service like direct deposit or digital banking). The result is a richer pool of insights from which to draw, which maximizes performance.

Part of what makes Digital Onboarding, Inc. so effective is its mission. Rather than asking new members to figure things out themselves, they guide them toward their best options. Onboarding and account management become friendlier, more manageable tasks. The platform nudges people to take better control over their finances…

 

Want to Learn More About AI-Based Fintechs Working with Credit Unions?

CU 2.0 researches, works with, and speaks to countless fintechs. We’re happy to help you learn more about the technologies and providers that can take your credit union to the next level.

Contact us to learn more about our Quarterly Fintech Calls. We’ll call you to discuss a few of the fintechs, products, and strategies that have caught our eye recently. It’s short, it’s personal, and it’s free to credit union leaders.

But don’t forget to read the book! Check out FinAncIal: Helping Financial Executives Prepare for an Artificial World!