How Emerging Tech, Data and AI are Reinventing Bank Marketing

Jim Marous (00:00):

Hello and welcome to Banking Transformed, the top podcast in retail banking. I'm your host, Jim Marous, owner and CEO of the Digital Banking Report and co-publisher of the Financial Brand. Allison Cerra, Chief Marketing Officer at Alkami Technologies joins me on the Banking Transformed Podcast today.

Jim Marous (00:28):

Allison has seen marketing evolve tremendously over her career, as an expert on harnessing insights to fuel marketing campaigns and optimize return on investment. But it's not just about big data, it's about the right data, transforming information into actionable strategies that can drive customer engagement, loyalty, and trust. It's about that final mile.

Jim Marous (00:55):

Allison and I explore how banks can leverage analytics to create insight-driven campaigns, the importance of personalization in marketing and how technology is changing the future of customer interactions in financial services.

Jim Marous (01:11):

Financial institutions of all sizes must maintain the delicate balance between automation and the human element in customer service, as well as understand the significance of using insights to enhance customer experiences and financial wellbeing rather than just pushing products.

Jim Marous (01:30):

As we are about to embark on 2024, banks and credit unions that are on the edge of digital transformation must be willing to take the leap to become completely future ready.

Jim Marous (01:42):

So, Allison, welcome to the show. While we've become very familiar with each other over the last few years, could you introduce yourself and give our listeners a quick look at your background and also describe what Alkami does for the financial services industry?

Allison Cerra (01:57):

Yes, absolutely Jim. Well, thank you so much for having me. It is kind of weird that this is our first time on your show. I'm so honored to be here, but I always love talking to you. It's like talking to a friend. So, thank you for having me.

Allison Cerra (02:09):

My name is Allison Cerra. I'm the Chief Marketing Officer of Alkami. We are a digital banking provider that provides the digital banking software to regional banks and credit unions around the U.S. to help them compete against mega banks and win.

Allison Cerra (02:23):

I've been here now almost three years. And my background, I like to say I've been in marketing since the Earth's crust hardened. I started in marketing; my first job was a marketing intern for what would become Verizon Wireless at the ripe old age of 17. And I've been in marketing ever since. And so, I've been like at companies like Intel and HP and McAfee, and now I'm here at Alkami.

Jim Marous (02:47):

Well, so much is going on in the marketplace. I mean, even this last weekend there's been all kinds of turmoil in the marketplace around ChatGPT and OpenAI. And it's interesting how all these elements touch financial marketing. So, could you give us a brief overview of how you see the evolving landscape of digital marketing in the banking sector?

Allison Cerra (03:11):

Of course. Well, I mean marketing, like I said, I've been here for a minute and marketing has changed drastically from where it was when I started. I mean, marketing used to be, and we've all seen Mad Men, and it really did kind of depict what marketing has been for so, so long.

Allison Cerra (03:27):

Starting out as really advertising and kind of a spray and pray methodology. If you just kind of used 1.0 analog media and hope for the best. Now you're seeing hyper-personalization at scale. Things we couldn't have envisioned even 10 or 15 years ago are now making it into mainstream.

Allison Cerra (03:44):

And what I like to think about is you can never think about marketing without thinking about the market first. I say you can't spell marketing without market. It's our first name. And when you look at the market of the stress that Americans are under right now with just the inflationary period being where it is right now, looking at an inverted yield curve that we don't know, is it going to be a recession or not, every week, it seems like that news changes.

Allison Cerra (04:08):

Looking at student loan debt now coming back into the mainstream, you look at the fact that now it's more expensive for the first time in a long time to own a home than to rent. These are economic indicators that suggest that there's a reason why 80% of Americans say they are under financial stress right now.

Allison Cerra (04:26):

And what's interesting is our research says that about 56% of them expect their primary financial institution to know they're under financial stress. And here's the kicker, do something about it. Offer them financial tips, offer them helpful products and services that can help them in these tough times.

Allison Cerra (04:44):

So, when you shift the debate into what does the market need right now, they need really personalized offers at scale to help them in these extraordinary economic times in which we find ourselves, to help them through that, to help them navigate their financial futures. And when you think about where marketing can play a role and where more and more automation can play a role in that kind of problem, now it starts to get much more exciting.

Jim Marous (05:09):

It's interesting, you talk about customer expectations and it's not so long ago that the banking world was able to drive what consumers got as opposed to us having to listen. Well, we do have to listen now because there's so much going on around the banking industry, outside the banking industry.

Jim Marous (05:28):

But you being in charge of marketing at Alkami, you sense that things are changing. You're having to make adjustments at your company. But as you reach out to your clients, the banks and credit unions that you serve, what are the key challenges or gaps that you see that are really challenging the financial marketers to meet these expectations?

Allison Cerra (05:50):

Yeah, we talk to our clients all the time about this, and we do a lot of research here. I come from a research background, so I tend to have a bias that if I can go to the market and ask the question, I'd rather ask the question than assume that I know the answer.

Allison Cerra (06:03):

So, we do a lot of research here and we've talked to marketers at financial institutions to ask that question. And we kind of see a few key themes happening here. One is, there is an amazing set of data that these marketers sit on top of. There's perhaps no better behavioral data than what a bank or credit union knows about their customers or members.

Allison Cerra (06:25):

You show me where you spend your money, I'll show you what's important to you. And banks and credit unions know where their consumers and businesses are spending their money, which is just a treasure trove of insight to a marketer.

Allison Cerra (06:36):

The problem is that these data sets have historically resided in these silos that are extremely difficult to penetrate. So, trying to make sense of very convoluted, unstructured data. And what I mean by unstructured is yes, the data’s structured, but it's not exactly intuitive. It comes in these bits and bytes and codes on the core that nobody can really interpret with just the layman's eye. You need to understand what that code means to understand what the transaction equates to.

Allison Cerra (07:03):

So, while marketers theoretically have the best first-party data available out of any industry, they can't harness the data because it sits in a silo. They have to go through IT. They have to understand what they're looking for. And then they have to go run these lists, which goes to the second problem. They sit in perpetual list running scenarios. So, no sooner do they run a list thinking they understand who they're trying to target with what offer at the right time.

Allison Cerra (07:28):

Then the list is presumably stale because you're running through a silo, you're trying to get the list manipulated. Now you're trying to get the list ready for the campaign. And by the time you know it, the list is dated, it's stale, and you're going back to the same IT department to go, "Hey, can you run that list again for me because I need to make sure it's still up to date."

Allison Cerra (07:46):

So, they stay in this perpetual cycle of list management, which I don't know about you, Jim, but most marketers don't love that. I'm just going to say. It's not exactly where they thought they'd spend their careers when they went into marketing, so they stay there.

Allison Cerra (08:00):

The third problem is there's a lot of technology that purports to solve the problems for the marketers. And what happens is they go on these promises by vendors that say, I can solve that problem for you only to find out that the technology is either difficult to implement, integrate, or use.

Allison Cerra (08:18):

And so, all of a sudden now they're left with what's called in software, derisive is called shelfware. You didn't buy software, you bought shelfware. Because it sits on the shelf. So, they're left with this shelfware that goes nowhere for them. And now they lose credibility in their organization the next time they try to make a run for automation that's going to help their cause.

Allison Cerra (08:37):

And then last but not least, is probably the most important. They lack a single version of the truth. So, assume you get through those three hurdles, assume you can get to the list, assume you can update the lists with regularity. Assume that you actually have automation that works. Now what you have to worry about is when you get into the boardroom that you're actually looking at the same data that everyone in that boardroom would agree is a common set of data they can agree to.

Allison Cerra (09:04):

So, if you make it to the boardroom and you try to prosecute the case, if this was the ROI of our efforts or of our campaigns, now you've got to make sure that the CFO, the COO, the chief retail officer, the chief commercial officer, that that chorus would say, I agree with the way you're measuring that data. And I agree that that would be accurate ROI.

Allison Cerra (09:24):

And if you make it to the boardroom, that's typically now the final hurdle. The gauntlet that you have to run is to prove to the stakeholders in the executive suite that the data you're measuring actually is real and is actually one version of the truth. So, it's not easy being a marketer in these institutions these days.

Jim Marous (09:42):

It's interesting because the foundation upon which marketing today is built, it's the same as it was when I was a financial marketer four decades ago. The reality is we all know we need to use data, but we're really in most cases overwhelmed by where to start.

Jim Marous (10:01):

What are the first steps that you recommend? I mean, if a marketer right now is stuck on stop or neutral, not stop neutral, and they're getting reports or they're getting data at their fingertips, where do they start? Because most organizations, to my knowledge, really feel that their data's not market ready.

Jim Marous (10:21):

But the reality is there's partners like Alkami that can really help them move that data into utilization that final mile. So, what steps would you recommend marketers take to start?

Allison Cerra (10:33):

Well, I think one thing that we've realized, as with most things, and you know this from the interviews that you do, as with most things, this starts with a cultural change. So, the first thing that I would say marketers have to look at is do you have the relationships established between three key constituents in the enterprise? At least these three.

Allison Cerra (10:52):

The first is IT, do you have a working relationship with IT that you can actually come to the table together and understand the data sets that you do have, where the data resides, and how you can tap into that data with hopefully maybe some of the tools you already have deployed that maybe are being right now more considered shelfware than software because you're just not fully utilizing what your organization may have already bought.

Allison Cerra (11:16):

The second constituency that you really have to think about is compliance. Because the other challenge these marketers have is, we know in this industry is you can't just use demographics to inform how you're going to target.

Allison Cerra (11:28):

Other industries have that benefit. They can actually look at demographic data that's widely available and use that as the proxy to target their customers. Here we know that that is absolutely not the case. So, you have to make sure that compliance is also at the table with you so that whatever you're looking to do meets the compliance requirements that you need to serve.

Allison Cerra (11:52):

And then last but not least would be whoever in your organization, whether that's the CFO or the equivalent who looks at the numbers daily and knows what the organization is measured on from an ROI perspective, that you are saddled up really tight with that team to make sure that marketers don't fall into the trap of looking at the metrics that we admire that are leading indicators like impressions, like reach, like frequency, for those of us who've been here for a minute, but actually are measuring what the conversions are and how the organization views those conversions.

Allison Cerra (12:27):

What is the economic impact of a loan converted? What's the economic impact of a deposit account converted? And how do you now use those metrics and the way that that CFO thinks to inform how you are going to measure your campaign?

Allison Cerra (12:40):

I think it starts there. If you get kind of saddled up with IT, with compliance, with the CFO to understand what data do we have and where does it sit today? Is it being used? How do we use that data responsibly and within the compliance requirements? And how do I now look at the outcomes that a CFO would consider important in the boardroom?

Allison Cerra (13:00):

You're at least getting to the goal of what you're trying to get to before you start going and acquiring additional tools and software that may help fill in some of the gaps where you find them.

Jim Marous (13:11):

It's interesting, we talk a lot about the importance of utilizing third-party solution providers like Alkami. We do that because most organizations are not big enough to do it on their own. They really have a challenge because in many cases they don't have the talent.

Jim Marous (13:27):

They may not have the number of people they need to do; they may not have access to the data the way they need it. And most importantly, very few organizations today, and you've mentioned it earlier around shelfware, we have a hard time taking what's the data and putting it into use. How does Alkami partner with financial institutions to actually take what they have in their organization and put it to use on the street?

Allison Cerra (13:56):

Yeah. So, we bought a company a couple of years ago called Segment. And the reason we bought a company called Segment is because we realized when we looked inwardly at ourselves that data and marketing was going to be the next frontier for hyper-personalization at scale for financial institutions.

Allison Cerra (14:12):

And we knew that to really get that right, there's a reason that machine learning and AI and everything is all the buzz these days. But the thing is, if the data isn't strong and if the models have not been trained over several, sometimes years of period to really understand what the data is telling you, it's kind of hard to get in that game.

Allison Cerra (14:31):

It's the reason that Google is still the behemoth search engine that it is because it's really hard to take on Google in search when they have spent decades understanding what people are searching for and then using models to inform that they basically know what to serve back up to you. It's really hard to penetrate that game once you do it really well.

Allison Cerra (14:51):

So, data's kind of that way. It's kind of like if you got the head start in data before data was cool, you're in a really good position today. If you're trying to get on the data bus now, maybe not so much. So, Segment was in the data business before data was cool. And they were doing it for like 15 years.

Allison Cerra (15:06):

We acquired them and what they do, their specialty was taking all of that core data that a financial institution has that passes through its core every day, but is in many cases completely unusable, especially to a marketer because you have to understand what that data is telling you.

Allison Cerra (15:23):

So, what Segment did was they basically over many, many years cleansed and codified that data and then started to assign behavioral tags not based on demographics but based on transactional data. So, that you could actually look at who might be aspiring homeowners who are competitive credit card users in your footprint, who might be looking for a deposit account at a higher yielded interest rate?

Allison Cerra (15:48):

You can actually use these demographic tags, I shouldn't say demographic, sorry, my apologies, but behavioral tags, not demographic tags, to target who you're looking for to basically insert a campaign. And the great thing is that unlike having to go to IT perpetually, because IT, I'm sure doesn't love this either, knock on the door, I need another list.

Allison Cerra (16:11):

That once you basically enter the campaign, once you have the behavioral characteristics that enter you into the campaign, you're automatically entered in the campaign based on that core data.

Allison Cerra (16:21):

And likewise, Jim, once you convert, so let's say it's for a new deposit account, once you convert into the campaign, you're automatically exited from that campaign, so you don't see that message again.

Allison Cerra (16:33):

So, Ron Popeil "Set it and forget it." If you don't know it, google it. It's kind of the set it and forget it of list management and it lets you harness the data and its compliance requirement, certified because we're not using demographics, it's all anonymized and it just kind of helps marketers do what they want to do, which is go out to the market and serve up useful offers and tips to their customers and members.

Jim Marous (16:59):

That's the key. It's interesting. I'm a big fan of Segment. They're in my backyard right up here in northeastern Ohio. I've known them from years. I've known the founders of the company. And what really made that partnership with you special is that unlike a lot of data companies, they really spent a lot of time, all their time, on finding ways to actually deploy that in the marketplace. That final mile that — I talk about Salesforce being a tremendous tool.

Jim Marous (17:27):

But more than half the financial institutions out there have never used it. They buy it annually because they don't want to not have it because they know it's an important product to have. But the reality is they don't implement it.

Jim Marous (17:39):

And Segment does a really good job in the financial services industry, which is even more important, saying, here's your data, here's your opportunities, here's how you should go after that.

Jim Marous (17:49):

And for institutions that are smaller, that don't have a team that can continuously think up new ideas or more importantly know what parts of those ideas are really great and which ones will end up to be failures.

Jim Marous (18:03):

You really give financial institutions the GPS of financial marketing to help them say, tell you what, we're going to make your data work for you and we're going to generate revenue and we're going to lower your costs by doing so and you won't have to continually reach out to your data department.

Jim Marous (18:20):

And it's funny because that also went on 40 years ago where I realized even when I was in the direct marketing business for other financial institutions, getting the data department to look at what happened after the program, what were the results or to pull this the way you really wanted or to even think about other than simply filling an order, is this really what you should be asking?

Jim Marous (18:43):

That's such a key element. And another one of those key elements for using third-party solution providers that have been there, done that. Now mind you, what's interesting is our core providers tell us the same things. They can help us do those things.

Jim Marous (18:57):

The challenge many times is they can't do it with all their clients. They can't be the best at this. And that's one of the things I really like about Alkami and Segment is that you really work on behalf of your clients to do that. So, can you share an example of a bank that you know has successfully implemented what I'm going to call an insight driven campaign to achieve a strong ROI?

Allison Cerra (19:20):

Yeah, well thank you for that, Jim. That really means a lot coming from you. Because I know you see a lot of products in this space. And I do want to say, there was a reason we bought Segment obviously because Alkami saw how special it was, but whether you are one of those marketing teams that is very resource constrained to your point, this product comes with the marketing automation tool built into it.

Allison Cerra (19:45):

So, you can actually take the full stack and say, and I want the marketing automation tool so that I can intercept you via email. I can intercept you via programmatic media on the web. I can intercept you with my analog channels. It's omnichannel.

Allison Cerra (20:00):

But Jim also, let's say you are deployed SFDC. Because we have some who have SFDC Marketing Cloud already deployed, they're kind of ahead of the game. Then you can just take the data insights because one thing SFDC Marketing Cloud isn't able to provide is let's cleanse that core data for you and tell you based on your existing account holders, who they are, what they're doing, and what campaigns we should serve up to them.

Allison Cerra (20:23):

So, even if you just needed the data and you said, I've already got my marketing automation, I don't need everything that you're offering, we actually have a modular kind of approach that meets the financial institution where they are.

Allison Cerra (20:34):

And our data to your point around, give an example. Well, literally as wide as your imagination is, you can think about the kinds of campaigns that our customers can launch. Whether that is I need to basically drive up interchange and this is a very basic one and I want to look at how many of my existing account holders are using bill pay for recurring subscription payments.

Allison Cerra (21:01):

And I want to intercept them to say, why don't you move that to your debit card or to a credit card I'm offering you so that you as the account holder, get rewards as part of that exchange. And me as the financial institution behind the scenes, I'm now collecting the interchange revenue, converting what is now a cost center bill pay into a revenue center, which is interchange revenues.

Allison Cerra (21:23):

That's a very kind of basic, but something that is harder to go do than you might think because again, you're trying to pull those lists. So, you can basically set up a search, find those people, and every month intercept them with what is your debit offer or your credit offer.

Allison Cerra (21:39):

Speaking of debit and credit, you can look up, this is one that's a big hit with our customers. You'd be surprised just to know who in your account base has a competitive product with somebody else. So, being able to find all the competitive credit card holders and who they have the card with.

Allison Cerra (21:57):

So, if you know you have a particular offer that's strong against a mega bank’s offer, you could find said account holders that have a credit card through that mega bank and basically make them an offer of your own. Same thing with the deposit account. Same thing with the loan offer.

Allison Cerra (22:13):

So, you can actually start to understand even if you used it for nothing else than to understand your market and where your account holders are also shopping and who they're using. It's a really insightful tool. Our research shows that based on campaigns that are launched, the average customer experience is a 13 times ROI on those campaigns.

Jim Marous (22:35):

Wow.

Allison Cerra (22:35):

And that is their data, not ours. So, the tool allows you to set up those parameters to my earlier point, it starts with culture. Get with your CFO and say, what is the value of a deposit account to us? What is the value of a loan account to us? What is the value of a new credit or debit card holder to us?

Allison Cerra (22:51):

And then the tool allows you to say, how long do you want to count the conversion? So, if you're launching the campaign on day zero, I don't want to count conversions past day 60, let's just say. So, even if you came in six months later, I'm not going into the boardroom to try to attribute that to this campaign.

Allison Cerra (23:09):

I'm going to keep the window tight. The FI in this case gets to set their own parameters and that 13 times ROI is what the tool then generates. Is, okay, this is what you generated in marketing based upon those campaigns that you've run. That's the average.

Allison Cerra (23:25):

That is scary-smart and scary-cool. It's interesting because a lot of organizations now are looking for deposits and they're looking for a way, how do I increase deposits without killing my interest rate margin? I mean, you can end up in a really bad situation.

Jim Marous (23:40):

And the smartest organizations now, and we've heard this a couple times, I know Segment can do it, look at deposit flows. So, they look at when I get my paycheck, let's say, where does my money go? It doesn't all stay with my primary financial institution. Well, if a bunch of it goes to SoFi, or a bunch of it goes to XYZ organization to pay in a higher rate, it's going to cost me a whole lot less to reach out to those people and offer a very highly competitive rate than to offer it to the marketplace as a whole.

Jim Marous (24:08):

Because then I'm only doing a blended rate with whatever other deposits the consumer has.

Allison Cerra (24:11):

That's right.

Jim Marous (24:12):

That type of mixing of technology and data. And actually, that final mile implementation process is so key. And again, as I'm looking, there's no financial institution that feels like they have enough marketing people, but to continually generate these ideas that have been tested, that has played out the marketplace, that can be composable.

Jim Marous (24:32):

In other words, if I only … deposits, I don't have to buy everything to get there, I can look at how do I implement that strategy.

Jim Marous (24:40):

So, you mentioned it in the last answer about technology. How important is it for marketers to have the right technology stack to support the data-driven campaigns? I know that one of the benefits of Alkami, one of the things Alkami does to bring together a whole lot of solution providers that work together towards whatever goal the financial institution's trying to reach. But how important is right now for the technologies stack to be correct?

Allison Cerra (25:07):

I think, certainly you can say this all the time, it's never been more important, and it'll be more important tomorrow. It literally is, I could not do my job as a CMO of this company without the right technology to help me understand my own customers and where they are and to intercept them at the right place at the right time.

Allison Cerra (25:26):

You are non-competitive. You don't at least have the ability to do that. And the problem is the competition is no longer, well it's the regional banker credit union down the street from me. Your competition are these mega banks and these neobanks that have a lot of money at their disposal, particularly in marketing to help them do this.

Allison Cerra (25:49):

So, trying to find the tools without getting the tools sprawl, because I've seen that at other companies where you just keep adopting tool after tool after tool, hoping that eventually this will all be threaded together magically, and it'll work for you and it doesn't automagically happen.

Allison Cerra (26:05):

You basically end up with tools that are disparate. You end up with tool sprawl, tech debt that is then hard to basically undo and reverse and then move forward. So, it's really about getting the minimally viable tech stack that you need to do what you have to do and making sure that the tech that you're using is integrated. That you've got the integrations between your core systems-

Jim Marous (26:29):

All talks to each other. Yep.

Allison Cerra (26:30):

All talks to each other because there's no one system that knows it all. So, you've got to be thinking of tech that plays well in the sandbox with the other tech and that goes to all the integrations. It goes to the APIs that marketers don't need to necessarily know, but they have to kind of understand to know what questions to ask in the engagement process to make sure they're not left with stranded tech, literally stranded on an island somewhere or stranded on the shelf that is no longer usable.

Jim Marous (26:56):

It's interesting, we interviewed Raja Rajamannar from MasterCard and he wrote a book called Quantum Marketing and it was great because I haven't read a marketing book for quite a while, but his book was so intriguing because all this stuff that is out there today, all the technologies, all the data sets, all the opportunities that are out there, they're totally overwhelming because there's so many tools out there that can be used. You have to select between those and figure out which ones will work together.

Jim Marous (27:26):

So, when we're looking at emerging technologies, which every day when we open up our journals, whatever we open up, there's something new coming out. What emerging technologies like AI are you excited about that you believe will take database marketing to the next level for financial institutions?

Allison Cerra (27:44):

Well, certainly AI is the key. I mean, AI is the next big thing and AI has been around for a long time. I mean, it's not new, but ChatGPT just brought it into the public discourse in a way none of us could have expected. And now you just can't read a paper today without AI being part of it.

Allison Cerra (28:02):

But I'll tell you where AI gets really interesting because if AI is deployed ethically, responsibly, making sure that those models are not polluted, making sure that they are not bias, there's a lot to AI to make sure you get it right and to make sure that you aren't unintentionally perpetuating biases in the models based on the data again, that they've been trained on.

Allison Cerra (28:25):

But if you get it right, now, you can start to apply AI models. In our case we have one that looks at engagement risk. So, one of the biggest things that's a risk to the financial institution is the silent attrition risk. Nobody calls their institution to say, "I'm closing my account today." They just-

Jim Marous (28:41):

They don't even close it.

Allison Cerra (28:42):

No, they just leave it open and then they just drift to other alternatives. So, being able to have an AI model that informs you and pops to the top who are your most engaged and loyal potentially account holders so that you know, to your point as you're spending limited dollars, what you might want to offer them first versus who are the ones that might be showing signs of attrition risk based upon a lot of parameters that the human eye could not put together on its own.

Allison Cerra (29:09):

And really start to surface those account holders to the top so that you can maybe intercept them before they decide, I'm really going to go somewhere else and put more of my wallet somewhere else. These are the things AI can do to help you be smarter. It's all about making you smarter.

Allison Cerra (29:26):

I don't subscribe to the philosophy that AI's going to take away jobs. I think AI is going to replace jobs and I think it's going to force you just as social media 10 years ago entered in and ushered in a new crop of marketer that now that is a competency to know how to do social media marketing.

Allison Cerra (29:45):

I think in many ways you can make the same argument data marketing 10 years ago, 15 years ago when MarTech stacks first started kind of really coming into their own, that ushered in a new category of marketers. I think AI is going to do the same thing. It's going to change the role of marketing, but for the jobs it replaces, it's going to create a whole new spectrum of jobs that are yet to be seen and allow a marketer, and in this case an institution to use their limited human resources so much more smartly.

Allison Cerra (30:15):

So, the human machine teaming really starts to become much more interesting as to what you delegate to the machines and what you allow your precious human capital to go do with their minds that really are still human-interest problems to go solve.

Jim Marous (30:30):

It's interesting, I say the same thing that you said, which is, change has never happened this fast, it'll never happen this slowly again. Well, how do you keep up with that change? Well, I have found that by implementing a number of different AI tools, it helps me get educated faster.

Jim Marous (30:46):

It doesn't replace me, but what it does, it makes it so I can do what I do better, faster, and with more knowledge. I mentioned on a previous podcast, we just did a podcast with the person who wrote a book called The Future Normal. And it basically looks at the future in a very positive light on what could become our normal. And he has, I think 30 chapters and I said, "How did you use AI for this book?"

Jim Marous (31:13):

And he goes, "Well, interestingly, I didn't go through the normal route saying, help me write this chapter." He had AI evaluate every chapter and he said, "Evaluate as if you just gave it a one-star review. What did you find wrong with this chapter?"

Allison Cerra (31:28):

Wow.

Jim Marous (31:29):

Exactly what I said, that comment, which I had never thought of, is so powerful because if you are trying to get something out there now people kind of do that with emails. Where they'll send emails through an AI tool to say, am I saying this the best possible way, especially on negative emails.

Jim Marous (31:46):

But if you sent your writings and said, where's my gap? What have I missed? Why would you give me a one-star rather than a five-star? It becomes very powerful. Because I know that many times AI opens my eyes to an angle that I maybe wasn't looking at.

Jim Marous (32:01):

So, it lets me write in a different way, in a different focus. It helps me with podcasts and developing questions. I'm sure it probably could have helped you with some of your answers, because again, the world is changing so fast that things happen without us noticing them. And so, this helps us keep on top of things.

Jim Marous (32:18):

So, we talk a lot about digital and technology and automation. How do financial institutions strike a balance between what's capable digitally, and the need for human interaction?

Allison Cerra (32:33):

I love this question because like I said, I don't think machines are taking over the world. We're still a little bit away from the singularity, at least a decade or so. We'll see.

Allison Cerra (32:44):

But I'll give you an example of how you can use the automation but still create the human touch. And it came from an example that when we acquired Segment, the CMO of Segment actually was a former customer of the product and was such a loyal, avid customer of the product. She came over and became the CMO of Segment. We're so glad she's here, she's on our team now and amazing.

Allison Cerra (33:10):

But one of the campaigns she and her team launched when she was a customer of Segment on the other side, was around this time of year, it's thoughtful to do random acts of kindness. You want to show your account holders that you care about them as human beings.

Allison Cerra (33:24):

And it's not unusual for a company of any kind to send a gift and to send a card of some kind, a gift card to say, "Hey, thanks for being a loyal customer." Well, what her team did was they said, look, we could do that. We could send coffee cards to Starbucks to every single one of our account holders and be done with it.

Allison Cerra (33:45):

Or we can use this data to actually understand who prefers Dunkin' Donuts versus Starbucks. And they looked at the data and did a very analog campaign because this was sending out cards and kind of doing but using data to automate and understand preferences. And it's not like a customer would know, oh wow, they must have known that I love Dunkin' Donuts and my neighbor got Starbucks.

Allison Cerra (34:10):

Not that they necessarily knew that, but what a delight to be somebody who maybe loves Starbucks like me, maybe not as big on Dunkin' Donuts, although I'll certainly drink any coffee you put in front of me. But to get a Starbucks card, it's like, wow, that's great. It's like, I'll definitely use this versus somebody who loves Dunkin'. I lived in the Northeast for a period of time, and I can tell you people love Dunkin' in the north.

Jim Marous (34:31):

Exactly right.

Allison Cerra (34:32):

That's it. Now it's on every corner and everybody loves Dunkin'. But to understand your account holders, to actually get that human interaction to say we're going to do random acts of kindness. This isn't about generating ROI; this isn't about I'm going to go show — this is just about thanking our account holders for being who they are.

Allison Cerra (34:50):

And oh, by the way, let's be smart when we do it because we actually do know their preferences based on, again, if you show me where you spend your money, I'll show you what's important to you. Let's go look at who likes one variety over the other and be tailored in what we offer them. That to me is the best example of that human kind of like, that's a moment of magic of okay, now we're getting somewhere.

Jim Marous (35:10):

Well, it's interesting is I worked with a direct marketing company before I did what I'm doing today, and we've served only financial institutions. And one of the things we asked was how do we collect new data that's outside the norm that we may not find?

Jim Marous (35:23):

And we tested a process that basically asked customers to answer five questions and about their use of financial products, their financial wellbeing, key questions that would directionally help our communication.

Jim Marous (35:36):

But the last question was, in the future, if we ask you surveys about information like this, what would you like as a possible thank you for what you did? To your point, was it a $5 Starbucks card? Was it a $5 card for an ice cream cone at a regional ice cream place? Is it a donation to a charity? I think there were four choices.

Jim Marous (36:01):

What was interesting about that is as soon as people turned in their survey, we sent out the reward. We never told them we would do it based on this first set, but what it did was it showed them, guess what we're asking you a question we're actually listening to.

Allison Cerra (36:16):

That's it.

Jim Marous (36:17):

And that value transfer of trust and the belief that God, this is not going to be like, fill out a 14-page survey in your financial wellbeing and I'm going to put it in my side drawer and never open it again. This is the key element and as you said, it's a great way to take some of the digital and some of the human and put it together.

Jim Marous (36:37):

One thing that I know your organization is extraordinarily focused on is not just the selling of products, but to improve financial wellbeing. What are you doing or what have you seen done to actually help the consumer in an empathetic way?

Allison Cerra (36:56):

Yeah. Well, I think again, it goes back to these are very interesting economic times. We've not been here for a minute in this kind of inflationary period. Are we going into a recession? Are we not? As I said at the top here-

Jim Marous (37:09):

Deposit pricing.

Allison Cerra (37:11):

Deposit pricing. I mean, we're seeing it's like what's old is new again, our FIs are saying for the first time we're having to compete for deposits. We have people on our team that don't even know what that means because they weren't here the last time that we had to actually compete the way that we are for deposit accounts.

Allison Cerra (37:28):

So, when I think about kind of where that is going and how you can intercept these generations, especially when I look at younger generations that are under these very uncertain financial times, the future for Gen Zs right now and millennials, even though we sit at the brink of the greatest intergenerational wealth transfer in history. The question is who's going to get that money?

Allison Cerra (37:57):

And there are some who say it's going to be, the rich are going to get richer, the poor are going to get poorer. It's just going to be bestowed down to those who already have the wealth. That means that there are generations right now that the financial future and the American dream are a bit uncertain.

Allison Cerra (38:11):

Owning a home used to be the quintessential American dream. Now you have Gen Zs and millennials who are saying, look, I need to just live in the moment because I don't know if I'm ever going to get there. So, if we can actually democratize technology to make financial wellness something available to the masses, no longer reserved to the elite that used to …

Allison Cerra (38:31):

That that was the norm of, well, look, I don't have an advisor. I don't have a professional advisor telling me where I should be putting my money, how I should be thinking about the next loan that I take out. What is the best offer for me?

Allison Cerra (38:44):

If we can actually use technology to inform how to intercept these consumers and small businesses in their time of need to actually serve up in some cases wellness tips to your point or serve up some alternatives because the average consumer does not know about the plethora of products available in their bank or credit union.

Allison Cerra (39:04):

How do we make this so that it is more organic, more natural, more personal, and more relevant to them? I think that's where the next frontier really can go on hyper-personalization. And it's something obviously I'm passionate about. It's why I chose a career in this field and made a change over from kind of other tech areas because I really feel this is now more important than ever to actually do something where the technology can actually serve masses.

Jim Marous (39:32):

So, Allison, finally, we have two major reports that one has come out, one's about to come out. You have the 2024 Strategies and Budgeting for Financial Institutions playbook. It's an eBook that actually I was involved in as well as Brett King, Ron Shelvin, and Jim Perry in providing some insights into it. But a lot was covered there.

Jim Marous (39:54):

In addition, we have partnered together, the two of us as well as your research company on a brand-new report on Digital Banking Readiness, basically your maturity index for digital banking. Both those reports work really well in context with each other, but there's always surprises or there's maybe a double down on something we already know.

Jim Marous (40:16):

When you look at these two reports that really run side by side right now, what big takeaways did you have from both these reports?

Allison Cerra (40:24):

Well, I think it's something we knew, but to actually see it play out in multiple studies is where you start to go, okay, where there's smoke, there's fire at that point. Because one thing about research, and I said I love research, but one thing about research is you can kind of read into it what you think.

Allison Cerra (40:43):

If you don't do a lot of studies on the same topic, sometimes you get an outlier and you can run to that and say that's the case and you find out it actually isn't. We now have multiple studies that point to the same thing. And that is what we've been talking about, hyper-personalization at scale, data maturity in the organization, which is beyond just the tech stack like we've talked about here. It actually starts at a much higher altitude, which is a cultural change within the institution itself.

Allison Cerra (41:11):

The way the institution even describes its culture is different if you are a more data-driven organization versus one that is more intuitive experience driven. And we see the difference in the results and the outcomes of how data-driven institutions behave and perform versus their counterparts. That would be one.

Allison Cerra (41:31):

And then secondly, it is about an omni-channel experience. It's about reaching consumers and businesses where they are and where they prefer to be reached. So, it's no surprise that you see things like digital account opening, digital access, those kinds of things, mobile, it's beyond digital now. It's now mobile account opening. You're starting to see that there is an expectation among consumers, especially, that they expect to be served where they are.

Allison Cerra (41:58):

And this is obvious, Jim, we've been talking about it and admiring it. We've been talking about the Amazon influence on just about every aspect of our lives. But I think we kind of were maybe assuming, well maybe financial services will be different because it's so personal, it's so important, that maybe consumers would be a bit more reluctant to relegate some of those things to, "Hey, I really do want you to be more personalized with me and I want you to intercept me."

Allison Cerra (42:24):

And what we're finding is, lo and behold, consumers expect it here too. So, how do we help financial institutions bridge that gap where it is about the human touch, which is what, in my opinion our financial institutions have done better than anybody, is that the regional and community financial institutions are the backbones of the communities that they serve every single day.

Allison Cerra (42:45):

We don't want to lose that. It's not about we discard what has been so important in the legacy here. It's about how do you build on that legacy and bridge to a new future with even more promise by bringing in tools, technology, automation, cultural change that's for the better to help these financial institutions increasingly compete and win.

Jim Marous (43:05):

It's interesting, Allison, my takeaway for the same as yours, that some of the things, as you said, we've learned through the last few years that culture and leadership really are driving a lot.

Jim Marous (43:17):

That secondly, technology by itself isn't going to cut it. You can't buy yourself into better customer engagement. It takes more than that. It takes alignment, it takes marketing, it takes all these elements, it takes good data.

Jim Marous (43:32):

I think the other one that's a big takeaway for me was that we found that there were major success stories from the standpoint of digital transformation maturity on both the large and the small institutions. Not a surprise, the large ones are financed very well, so that helps a lot. But they have some internal issues they have to deal with. So, not every big institution is digitally mature.

Jim Marous (43:57):

We also found that some small institutions really out punch their weight with regard to their digital transformation maturity, their ability to really take new technologies and make them work.

Jim Marous (44:11):

And I'm going to do a shameless plug here for both of us in that part of this whole journey is something that we decided to start last year, which is the FIsionaries Podcast. FIsionaries Podcast is focused entirely on community-based finance institutions that are really doing the outstanding things.

Jim Marous (44:30):

And I've said this before, your team is aware of this, as my team is, that there's nothing that makes my week more enjoyable than to do an interview of a small institution that is way out punching their weight. Many times, it's people that have enthusiasm that blows off the chart because their vision, their executive team and their implementation are all aligned.

Jim Marous (44:52):

They don't worry as much about the economic uncertainty. They just change their goals. They don't worry as much about the competition because they realize they're really doing what the competition's doing, and it's so much fun.

Jim Marous (45:04):

And yes, I'm going to point people to another place as well, the FIsionaries Podcast by Alkami. We do every other week interviews with smaller organizations that are just killing it in culture, in implementation, in marketing, in transformation, in digital engagement, all these other elements that are so important.

Jim Marous (45:26):

And it really is exciting to know that size really doesn't matter if you have the right mentality, if you're right at the right partners. And again, I want to thank you at the end of this podcast for the ability to work with you on the other podcast. It's all about the implementation cycle, so-

Allison Cerra (45:45):

I love it, Jim.

Jim Marous (45:46):

Thank you so much for being on this show today, though.

Allison Cerra (45:49):

Thank you, Jim. And thank you for partnering with us on that digital maturity model. I got a shamelessly plug you because we were looking at data from over 200 financial institutions that responded to this instrument, which was pretty in depth, as you well know.

Allison Cerra (46:01):

You were right there in the saddle with us, and at the end of it, we were kind of looking at the trends and yes, larger institutions have the benefit of financial resources, and you were the one that said, “Hey, is it about the size of the dog and the fighter about the size of the fight and the dog, which is it?”

Allison Cerra (46:17):

And you prompted our research firm to go back and look for those who were outperforming their peers in spite of their size being smaller and underperforming their peers in spite of their size being larger. And we were actually able to pull out some interesting characteristics of what those FIs shared in common, which gave a whole nother lens to the study.

[Music Playing]

Jim Marous (46:36):

Thank you.

Allison Cerra (46:37):

So, thank you for being you and representing the regional and community financial institutions on FIsionaries and beyond. And thank you for having me. This has been amazing.

Jim Marous (46:46):

Great. Until next time.

Allison Cerra (46:48):

Until next time.

Jim Marous (46:50):

Thanks for listening to Banking Transformed, the winner of three international awards for podcast excellence. We appreciate the support we've received through the years making this endeavor a success. If you enjoy what we're doing, please take some time to show some love in the form of a review.

Jim Marous (47:07):

Finally, be sure to catch my recent articles on the Financial Brand and check out the research you're doing on the Digital Banking Report.

Jim Marous (47:15):

This has been a production of Evergreen Podcasts. A special thank you to our senior producer, Leah Haslage, audio engineer, Chris Fafalios, and video producer, Will Pritts.

Jim Marous (47:25):

I'm your host, Jim Marous. Remember, the key to bank marketing ROI is to align with evolving customer expectations.

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