By Xav Harrigin

The Independent Community Bankers of America (ICBA) ThinkTECH Accelerator Demo Day is a nationally acclaimed program that promotes early-stage solutions designed specifically for community banks. The program is known for its commitment to fostering innovation in the banking industry, connecting the most innovative fintech companies with community bankers and industry leaders. At a recent Demo Day, Parker Steed, VP of Sales at Micronotes, delivered a compelling pitch that showcased the company’s innovative, AI-enabled, cloud-based marketing automation solutions for financial institutions (https://www.youtube.com/watch?v=Y_Mt84zq0qI, starts at 39:32).

Steed began the pitch by reflecting on the evolution of banking from in-person branch visits to digital interactions. He shared a personal anecdote about how banking has changed over the years, highlighting the importance of Micronotes’ mission to help community banks maintain strong connections with their customers in an increasingly digital world. He then emphasized the importance of emulating the traditional branch conversations in online and mobile banking environments, a feat made possible by Micronotes.ai’s cutting-edge technology.

Micronotes.ai, based in Boston, serves about 140 community banks in the U.S. The company’s growth has been supported by a distribution relationship with Fiserv and investments from Experian Ventures, TTVCapital, and most recently, Bank Tech Ventures. Being part of the ThinkTECH Accelerator has further enabled Micronotes.ai to connect community banks with their customers using big data, advanced analytics, and engagement technologies.

Steed’s pitch focused on two key areas: deposits and loans. He explained how Micronotes.ai’s technology identifies opportunities for exceptional deposits and initiates conversations with customers to retain those deposits. The company’s AI-driven marketing automation also helps banks predict customer behaviors such as delinquency and attrition, enabling banks to proactively offer solutions like overdraft protection products and retention strategies.

The Micronotes.ai solution goes beyond traditional banner ads in online and mobile banking. It offers 26X the click-through rate (CTR) of banners, more engagement, and most importantly, it starts conversations that enable banks to learn from and about their customers. This approach helps to keep the “community” in community banking.

Steed also highlighted how Micronotes.ai can help uncover “camouflaged small businesses” through the retail banking side of a bank. By identifying these businesses, banks can cross-sell products like small business credit cards or loans without increasing headcount.

The pitch concluded with a demonstration of how Micronotes.ai uses Experian credit data to identify creditworthy customers and find meaningful savings if they were to consolidate their loans with the bank. This personalized approach not only enhances customer experience but also helps banks retain and grow their customer base.

In a world where customers are constantly bombarded by ads from competitors and large fintechs, Micronotes.ai offers a solution that keeps community banks competitive and connected with their customers. It’s not just about retaining and growing deposits or booking better loans; it’s about starting meaningful conversations, developing relationships, and building trust.

Micronotes.ai is revolutionizing the way community banks engage with their customers. By leveraging big data, AI and machine learning, the company is helping banks to better understand their customers, predict their needs, and offer personalized financial solutions. The result is a win-win situation: customers feel understood and valued, while banks increase their revenue and deepen their customer relationships.

If you’re a community bank looking to take your data and make it actionable, Micronotes.ai is ready to help. As Parker Steed concluded in his pitch, “If you need to retain and grow deposits or book better loans, give us a call, we’d be happy to help.”

Introducing Ashley. 

A year ago, the 33-year-old college-educated professional was navigating the financial landscape with an annual income of $61,000. Like many in her demographic, she was balancing bills, rent, and loan payments while saving for a down payment on a home. Despite receiving enticing advertisements for “affordable mortgage rates”, her limited financial literacy became a roadblock to her home-ownership aspirations.

The journey from renting to owning a home is often filled with complex financial jargon and intricate processes, posing a challenge for first-time home buyers. However, the emergence of data analytics has revolutionized the mortgage lending industry. This technology empowers lenders to simplify and clarify the transition process for potential homeowners.

Today, Ashley is presented with a personalized 30-year fixed mortgage plan for a home valued at $250,000, with a down payment of 3%. The plan meticulously details the specifics of the loan amount and the mortgage rate in simple language. It further dissects the monthly principal and interest payment, along with estimated tax and insurance payments. Additionally, Ashley is extended a second loan that covers the majority of the down payment and closing costs. Despite her initial lack of financial knowledge, she now finds herself informed and confident, ready to transition from a renter to a homeowner. The innovative deployment of data analytics in mortgage lending has effectively demystified the process, propelling her towards her dream of home ownership.

The 2023 Mortgage Lending Landscape: A Paradox

The Mortgage Bankers Association has unveiled a unique trend in the mortgage sector. In 2022, the average loan balance for first mortgages escalated to an unparalleled high of $323,780. Yet, this increase was contrasted with the most significant contraction in issued mortgage loans since 2014. The first quarter of 2023 has witnessed a stagnation in list prices for homes across numerous metropolitan areas. However, this plateau is eclipsed by the ascent in mortgage rates, overarching economic uncertainty, and burgeoning household debt. These elements intertwine to further complicate the already intricate process of transitioning from renting to homeownership, particularly for first-time home buyers such as Ashley.

Data and Analytics: The Catalyst for Mortgage Lending Transformation in 2023

Deloitte’s 2023 banking and capital markets outlook underscores a growing demand among retail banking customers for more proactive guidance during challenging times. This sentiment is mirrored in a 2021 internal report by McKinsey & Co, which indicates a customer preference for a decision within ten days of submitting a mortgage application. The augmented availability of diverse data sets – including credit data, loan performance data, economic data, and behavioral data – is empowering lenders to meet these expectations. With the integration of big data and analytics into the marketing and offer process, lenders are better equipped to comprehend market dynamics, formulate effective strategies, identify and deploy innovative solutions that home buyers can benefit from. For instance, insights into borrowing behaviors and trends derived from consumer credit data can inform lending decisions and portfolio risk assessments.

First-Time Home Buyers: Navigating the New Landscape

The integration of personalization technologies driven by big data analytics has revolutionized the mortgage marketing and lending processes. These algorithms can analyze a buyer’s financial situation and preferences, providing recommendations for the most suitable mortgage options. This innovation simplifies the process of comparing different loan products, enabling first-time buyers to make more informed decisions. Furthermore, lenders can now present complex financial data in an accessible and meaningful manner, allowing consumers to understand the factors influencing their mortgage eligibility and interest rates, as well as the long-term financial implications of their mortgage choices. For first-time home buyers like Ashley, this evolution in the mortgage process has transformed a once daunting labyrinth into a user-friendly experience, significantly reducing the stress associated with such a significant financial commitment.

It’s a race to the finish for consumer loan business and debt refinancing. Fintech and alternative lenders are targeting bank and credit union customers for their loan business. Traditional lenders are now fighting back with technology that finds and refinances mispriced debt existing customers and members hold elsewhere.