Orlando has its celebrated Magic Kingdom—and for a few days in mid-October, financial services' best brought their magic, vision and actionable insights to the Florida city for BAI Beacon 2018. With speakers who ran the gamut from Bank of America’s head of digital banking to Amazon’s former chief data scientist, the third-annual event covered important topics on the minds of financial services industry leaders and the decisions they’re facing.
The speakers, sessions and roundtables delivered. One of BAI Beacon’s out-of-industry speakers, Focus Brands COO and North American president Kat Cole, even shared her recipe for growing business in her opening-night session: confront reality, stay incredibly close to customers and find the coalition of the willing.
BAI Beacon covered it all this year, and then some, including collaborations with Plug and Play, FinTech Forge, Digital Banking Report and leading solutions providers.
As much as we’d love to recap every single moment of the gathering, the best way to get the whole BAI Beacon experience is to check it out for yourself. As for 2018, here are five highlights.
AI and virtual assistants: An era of Erica
Though it was Bank of America’s Michelle Moore on stage Wednesday afternoon during the “Transforming the Customer Experience with AI and Virtual Assistants” session, “Erica” stole the show. The voice-activated assistant was built under Moore’s direction by an in-house group at BofA; close to a dozen team members were in attendance.
“Voice is going to be a thing of today and tomorrow,” Moore said, explaining her team’s mindset at the start of Erica’s development in 2016. “How do we take that technology and make it real for our customers inside our app?”
As the extensive technical work required to build Erica moved forward, Moore’s team enlisted customers to test the virtual assistant and offer feedback that helped shape the final product. “We needed to turn technical speak into customer speak,” Moore said. “Letting the customer use it is the only way.”
The voice-enabled virtual assistant got further attention the following day, when the Bank of America assistant captured the first-ever BAI Global Innovation Awards People’s Choice trophy.
Digital banking: Welcome to the human league
A major highlight of BAI Beacon was “Humanizing the Digital Experience in Banking,” a report released by BAI and Jim Marous, owner and publisher of the Digital Banking Report. It reveals that nearly one in four respondents from financial institutions (23 percent) have “no plans to consider an AI solution in next 18 months.” Another 37 percent, while replying “we have it on our roadmap to consider in the next 18 months,” did not indicate any firm commitment to do so.
“We have very quickly gone from digitalization—which we've barely caught up with—to humanization,” Marous said. “But we're not doing a great job letting the customer know we care about them, that we know them. My dry cleaner has more interaction with me, and understanding of me, than my bank.”
As part of the same session, Umpqua Bank’s EVP and chief strategy officer, Rilla Delorier, shared the story of how Umpqua developed the Go-To app, which lets customers choose a banker based on professional background, expertise—and even personal interests.
“The best apps are the ones that connect people,” Delorier said. “There's an opportunity to learn from that interaction: Let's give them some joy and fun with banking. As bankers we're often scared of fun.”
BAI Emerging Leaders Network: a powerful premiere
BAI Beacon 2018 marked the launch of the BAI Emerging Leaders Network, a highly selective professional development network dedicated to connecting and fostering the growth of 100 future leaders who will drive positive change in the financial services industry.
“The BAI Emerging Leaders personify the potential that exists within our industry, and we look forward to developing and mentoring these leaders to help maximize their contributions to the financial services industry,” said Debbie Bianucci, President & CEO of BAI.
Those selected were treated to several exclusive experiences, including “The Business Behind the Magic,” a behind-the-scenes tour of Walt Disney World. Female members of the group also had a private Q&A session with Kat Cole. And many participants had an opportunity to meet with their mentors, leaders from throughout the financial services industry, throughout the event.
In the wake of BAI Beacon 2018, the business of mentoring, learning and leading will continue. The BAI Emerging Leaders Network will function year-round as a community.
Key trends for 2019: Learn as you grow
Karl Dahlgren, BAI managing director of research, along with Mark Riddle, BAI director of research, presented some of the latest BAI Banking Outlook research session, “What's Next: 2019 Outlook.” Here’s how Dahlgren summed up the key takeaway: "The top financial services challenges can be summed up in one word—growth."
And that growth, Dahlgren and Riddle pointed out, represents opportunity. To be certain, banks recognize this: BAI Banking Outlook survey figures show that financial services leaders identified deposit growth (48 percent), loan growth (42 percent) and new customer acquisition (37 percent) as top banking challenges for 2019.
One area to fuel growth in the year ahead is through digital account opening. The BAI research shared at BAI Beacon shows that 59 percent of consumers would prefer to open a deposit account online and 47 percent a loan account. Those numbers are much higher than those who’ve actually done either: 34 and 29 percent respectively.
Still, more than three in four millennials (77 percent) want to open those deposit accounts online, while 60 percent would do so for a loan account. Riddle explained that the disconnect between consumer desire and consumer action stems from the fact that “a lot of financial institutions don’t allow a consumer’s first account to be opened online. Consumers want to do it, but their banks aren’t giving them the option—or the process is difficult.”
Those findings connect directly to the Net Promoter Score (NPS) insights Dahlgren and Riddle shared. (The NPS measures how likely customers are to recommend a business to a friend or colleague.) For customers who were cross-sold, the NPS was 31—but those customers who did not have a cross-sell experience had a higher NPS at 36. “Cross selling can lead to lower customer loyalty unless opening and onboarding experiences are improved,” Dahlgren said. “Improving the account opening process should be a priority for financial services leaders in 2019, including making online account opening a viable option and positive customer experience.”
BAI Global Innovation Awards: The winners share their secrets
While typical competitions culminate with the presentation of shiny trophies, BAI Beacon 2018 put a twist on the formula by, in essence, giving event attendees the chance to take home a portion of the spoils, including a series of sessions on applying learnings from BAI Global Innovation Awards winners led by innovation expert and FinTech Forge managing director JP Nicols.
Fifth Third Bank, which captured Human Capital Innovation honors for its Maternity Concierge program, has provided more than 400 pregnant women and new mothers with services ranging from researching child care to planning gender reveal parties. Fifth Third executive vice president and chief administrative officer Teresa Tanner explained that the program came about as the result of an organization-wide innovation strategy. It would have never come about had it been hatched in a siloed team. “You’re only going to make incremental progress that way,” Tanner said. For those hoping to follow Fifth Third’s example, a good place to start is through Best Upon Request, the company that provides many of the Maternity Concierge program services.
BAI presented three Outstanding Achievement Awards during the opening featured session: Most Innovative Finserv of the Year to USAA from San Antonio, Texas; Disruptive Innovation in Financial Services to NovoPayment from Miami, Florida; and Outstanding Use of AI in Financial Services went to Ping An Technology from Shanghai, China.
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Lou Carlozo is the managing editor of BAI.