How credit unions can grow deposits with AI

Deposit acquisition is expensive and frustrating. More than a quarter of new deposit relationships are gone within a year. Advances in artificial intelligence software have made it possible for community financial institutions to use it to boost acquisition, cross-sales and retention. But first they must understand what's required to apply it. It's not yet "plug and play."

Competition for deposits from giant institutions on the one hand and aggressive fintechs on the other has put traditional community-based financial institutions on the defensive. Both the large banks and the startup players have been able to capitalize on highly targeted campaigns guided by artificial intelligence tools.

These AI-powered efforts can drive positive results without necessarily requiring paying high rates. Anyone can pay up for deposits, but they rarely stick absent some other reason or relationship. And the cost is usually not sustainable for institutions with high-cost branch networks.

Community banks and credit unions can now take a page from fintechs’ playbook and improve the efficiency and cost-effectiveness of their deposit acquisition and retention efforts. Most fintechs don’t build AI models themselves, observes Keith Henkel, founder and CEO of FI Works. They typically buy applications that have an AI modeling process built into them. Community financial institutions can do the same.

 

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