By Devon Kinkead

Deposits aren’t just numbers on a balance sheet—they’re the pulse of banks and credit unions, fueling lending, investment, and operational stability. Yet, deposit retention often takes a back seat to acquiring new customers. With mounting challenges like economic volatility, customer mobility, and rising competition, the ability to retain deposits has become a make-or-break factor for financial institutions.

The High Stakes of Deposit Retention

When a depositor leaves, the ripple effects go beyond just liquidity:

1. Liquidity Stress: A sudden outflow of large deposits can leave financial institutions scrambling to meet obligations, increasing reliance on expensive external funding sources.
2. Erosion of Trust: Large deposits are often tied to significant life events—retirements, home purchases, inheritances. Losing these customers signals a deeper disconnect in building trust during crucial life moments.
3. Regulatory Strain: Attrition can weaken compliance with capital and liquidity requirements, placing the institution at risk of penalties or operational challenges.

In fact, we’ve seen up to 50% of large deposits exit within 90 days without proactive intervention—a sobering statistic for community banks and credit unions with limited resources.

The Micronotes Advantage: Turning Risk Into Retention

Imagine having the ability to detect when an exceptional deposit is made and stepping in to help. That’s where Micronotes’ Cross-Sell Exceptional Deposits capability excels. The solution empowers financial institutions to:

• Identify Large (At-Risk) Deposits: Micronotes flags statistically anomalous deposits—those that often signal life events.
• Engage With Precision: The platform automated tailored conversations with large depositors, offering personalized solutions like retirement planning, mortgage services, or wealth management, addressing their needs head-on.
• Seamlessly Integrate: Compatible with major digital banking systems, Micronotes ensures effortless implementation without disrupting your operations.

This technology transforms a looming risk into a growth opportunity, helping banks and credit unions retain valuable deposits while deepening customer relationships.

A Story of Success: Real Customer Insights, Real Impact

Micronotes’ Cross-Sell Exceptional Deposits isn’t just theory—it’s already making a tangible difference for financial institutions. Here are real-world examples of how the platform helped retain deposits while strengthening customer relationships:

1. Preempting Fund Transfers to Competitors: A customer shared, “I was planning on investing into a money market with Wells Fargo at 5.4%.” With Micronotes, the bank proactively engaged the customer, offering competitive investment products that met their needs, preventing the outflow of funds.
2. Providing Access to Expertise: Another customer expressed, “I’d like to speak with an investment advisor.”Recognizing the opportunity, the institution connected the depositor with financial advisors, resulting in tailored solutions that solidified the relationship.
3. Encouraging Long-Term Commitments: When a customer stated, “I’d like to open a CD,” the bank was able to respond immediately through Micronotes, streamlining the process and securing funds for the long term.
4. Addressing Immediate Needs Thoughtfully: A depositor noted, “[I’m planning on using the funds for] vacation and dental expenses.” By engaging with empathy and offering personalized budgeting and savings advice, the institution reinforced its role as a trusted financial partner.

These interactions showcase how Micronotes empowers banks and credit unions to anticipate customer needs and respond with precision, ensuring deposits remain within the institution while deepening trust and loyalty.

Actionable Strategies for Deposit Retention

While Micronotes provides a technological edge, the broader strategy to retain deposits requires a mix of tools, culture, and customer focus:

1. Personalize at Scale: Use data to understand depositor behavior and offer tailored products. Customers value institutions that recognize their unique needs.
2. Strengthen Relationships: Build trust through regular communication, transparency, and financial advice that aligns with customer goals.
3. Focus on Digital Excellence: Ensure your online platforms are seamless and intuitive. Digital convenience is no longer optional—it’s a cornerstone of retention.
4. Incentivize Loyalty: Offer benefits like higher interest rates for long-term deposits or discounts on loans to loyal customers.

Looking Ahead: A Future Built on Retention

As banking evolves, one truth remains constant: deposits are the cornerstone of success. For banks and credit unions, retaining deposits is not just a financial imperative—it’s a testament to the strength of customer relationships and trust.

Micronotes’ Cross-Sell Exceptional Deposits capability offers the perfect blend of technology and strategy to help financial institutions not only navigate the challenges of deposit retention but thrive in them. By addressing the root causes of deposit attrition, namely inaction, and engaging accountholders at critical moments in their lives, banks and credit unions can ensure stability, grow their base, and fortify their future.

Your deposits—and your depositors—deserve exceptional care. Let’s make that happen.

By Devon Kinkead

Jonathan Parker’s Insightful Talk

Jonathan Parker, a distinguished professor at the MIT Sloan School of Management, gave a captivating talk at the Micronotes June 2024 Gain and Retain Forum that highlighted the unique integration of quantitative engineering principles with practical financial applications at MIT. While many recognize MIT for its engineering prowess, the Sloan School, which was part of MIT’s founding vision, plays a crucial role in applying rigorous quantitative methods to real-world business and financial problems.

The Legacy and Mission of MIT Sloan

MIT’s Sloan School embodies the institute’s motto, “hand and mind,” by focusing on solving real-world problems using scientific and quantitative tools. This approach aligns perfectly with the needs of businesses and government institutions. Parker emphasized that MIT Sloan is not an isolated academic tower but an active participant in the world, addressing practical issues with innovative solutions.

The Role of Finance in Economic Improvement

Parker, who holds the Robert Merton professorship, highlighted the significant contributions of the finance department at MIT Sloan. He mentioned Robert Merton’s work on the Black-Scholes options pricing model, which revolutionized financial markets by enabling the effective pricing and trading of options. This advancement facilitated risk transfer in financial institutions, thereby transforming the global financial landscape.

Consumer Finance Initiative

Parker discussed his directorship of the Finance Group and the Consumer Finance Initiative at MIT Sloan. Traditionally, business school finance studies have focused on corporate finance and asset management. However, there has been a growing interest in consumer finance, where finance theory intersects with behavioral economics. This initiative aims to understand and improve the financial instruments used by households, such as loans, payments, insurance, and savings.

Intersection of Policy and Academia

Beyond academia, Parker is involved in financial policy, serving on the Academic Advisory Board of the Congressional Budget Office (CBO). The CBO provides nonpartisan economic analysis of legislation, ensuring informed decision-making in Congress. Parker’s work emphasizes the importance of using the best tools and analysis to guide policy, despite the polarized political climate.

Collaboration with Financial Institutions

Parker’s extensive experience includes consulting for Federal Reserve banks and major financial institutions like JP Morgan Chase and Fidelity. He highlighted the importance of partnerships between academia and industry to drive research that benefits both sectors. MIT Sloan collaborates with financial institutions through joint research projects, data sharing for research purposes, and strategic decision-making support, enhancing the practical impact of academic insights.

The Impact of Technological Advancements

A significant theme in Parker’s talk was the impact of technology on finance. The Consumer Finance Initiative at MIT Sloan is particularly interested in how technological changes influence household finance, payments, savings, and lending markets. The availability of vast amounts of data and advanced computing power has enabled unprecedented analysis and understanding of financial behaviors and market dynamics.

Research and Real-World Applications

Parker shared several research projects to illustrate the practical applications of academic work at MIT Sloan. One study explored the effects of tight lending standards on credit markets, showing how strategic screening by lenders can influence market dynamics. Another project investigated the refinancing behavior of households and its implications for monetary policy effectiveness. By sending personalized reminders to mortgage borrowers, the research demonstrated a significant increase in refinancing rates, highlighting an innovative approach to stimulate economic demand.

Future Directions and Educational Innovations

Parker also discussed the development of new courses at MIT Sloan, such as “Consumer Finance and Fintech,” which reflects the evolving landscape of financial education. These courses examine the structure of household finance industries, the impact of new technologies, and the future of financial products and services.

Conclusion

Jonathan Parker’s talk underscored the unique role of MIT Sloan in integrating engineering principles with finance to solve real-world problems. By combining rigorous academic research with practical applications and policy insights, MIT Sloan continues to lead in advancing our understanding of financial markets and improving economic outcomes for households and institutions alike. The Consumer Finance Initiative and other collaborative efforts exemplify how academia and industry can work together to drive innovation and positive change in the financial sector.

By Xav Harrigin-Ramoutar

Today, operational efficiency is crucial for community financial institutions aiming to thrive. Efficient operations streamline workflow, improve service delivery, and enhance customer satisfaction and retention. Automation technology stands at the forefront of this transformation, offering robust solutions that significantly reduce manual workloads and operational costs. By integrating advanced automation features, these institutions can achieve faster, error-free processes, ensuring a superior customer experience. This blog explores how Micronotes’ innovative automation technologies can revolutionize operational practices, setting a new standard for efficiency and effectiveness in the industry.

Streamlined Operations with Micronotes

Micronotes products like Growth Opportunity Analysis and Exceptional Deposition Solution employ advanced analytics to enhance the operational efficiency of community financial institutions. By integrating advanced analytics with extensive banking and credit data, Micronotes automates crucial operational tasks like loan and deposit acquisition.

Key features of Micronotes’ product capabilities include the automatic detection of mispriced loans using Experian data for prescreen marketing. This automation helps financial institutions target and recover loans efficiently, minimizing the need for manual review and analysis. Another feature focuses on managing deposit retention; the system identifies potential deposit attrition and uncovers new business opportunities through behavior-driven communication strategies.

The automation of these processes significantly reduces the manual workload and ensures that these jobs get done, 24 x 7 x 365. Staff members are freed from repetitive tasks, allowing them to focus on more strategic activities that require human insight. Moreover, the use of automation in processing vast amounts of data reduces errors typically associated with manual operations.

The operational benefits are clear: reduced costs from decreased manual labor, lower error rates, and an overall increase in efficiency. This not only enhances the financial health of the institution but also improves customer satisfaction through more timely and personalized services.

Success Stories

Micronotes has notably enhanced the operational efficiency of community financil institutions through its Exceptional Deposit Solution. A recent case study involves a community bank that implemented the solution to target customers with unusually large deposits. By employing personalized engagement strategies and predictive analytics, the bank substantially increased its deposit retention rates within just two months. Specifically, the campaign generated significant leads, resulting in over $1.6 million in new certificate of deposit (CD) purchases. Feedback from the bank highlighted the ease and effectiveness of the Micronotes system, noting an improvement in customer satisfaction due to more timely and relevant interactions. This success story underscores how Micronotes’ technology can transform deposit retention and customer retention, contributing to greater operational success for financial institutions.

Conclusion

Automation is transforming the financial services sector by significantly enhancing operational efficiency, reducing errors, and lowering operational costs. For community financial institutions, adopting automation technologies is no longer just an option but a necessity to stay competitive and responsive to customer needs. By automating routine tasks, institutions can free up valuable human resources for more strategic initiatives, ultimately improving service delivery and customer satisfaction. The benefits of automation extend beyond immediate operational improvements, contributing to long-term financial health and stability. As the financial landscape continues to evolve, embracing automation will be key to maintaining a high level of service quality and ensuring accountholder loyalty in an increasingly competitive market.

By Xav Harrigin-Ramoutar

In today’s competitive banking industry, community banks face a constant challenge: retaining customer deposits. With numerous alternatives available, maintaining loyalty and preventing fund outflows are critical for sustained growth. Micronotes’ Exceptional Deposits solution offers a powerful tool to address these challenges, leveraging analytics and personalized engagement to enhance deposit retention. This case study highlights how a community bank successfully used Micronotes to achieve remarkable results in deposit retention and wealth management growth in a matter of 2 months.

Introducing Micronotes’ Exceptional Deposit Solution

Micronotes’ Exceptional Deposit solution uses statistics to predict which customers are moving through a life event, manifest by an anomalous large deposit . By identifying these customers immediately, banks and credit unions can engage customers moving through a life event proactively, offering personalized solutions to both help customers and retain their deposits. This proactive approach ensures that banking providers can address potential withdrawals before they occur, transforming at-risk customers into loyal accountholders.

Benefits of the Exceptional Deposit Solution

• Catching Life Events: Accurately forecasts life events identifying those who likely need help, which their primary depository institution must deliver to stay ahead of potential fund outflows.
• Personalized Engagement: Delivers tailored interviews large depositors addressing their specific needs and concerns. Personalized engagement ensures that customers feel valued and understood, enhancing their loyalty to the bank.
• Proactive Retention: Engages customers before they decide to withdraw their deposits increasing the likelihood of retaining the customer and their deposits. Proactive retention strategies are essential for maintaining a stable and loyal customer base.

Challenges of Customer Retention in Community Banking

Customer retention in community banks is complex due to several factors:

• Competitive Offers: Customers have numerous alternatives, making it easy to switch banking providers. Community banking providers must differentiate themselves to retain customers.
• Customer Dissatisfaction: Unresolved issues or unmet expectations can lead to attrition. Addressing customer needs promptly is vital to prevent dissatisfaction.
• Changing Financial Needs: Customers’ financial situations and needs evolve over time, requiring continuous engagement and adaptation. Banking providers must be agile and responsive to these changes using technology.

Micronotes’ solution addresses these challenges by providing banks and credit unions with tools to understand and respond to customer and member needs proactively. By leveraging data, insights, and automation, community banking providers can implement effective retention strategies tailored to their customers’ needs.

Case Study: Exceptional Deposit Campaign

Campaign Overview

On March 1, a client community bank launched a campaign targeting personal banking customers who made atypically large deposits. These customers, identified through Micronotes’ analytics, received personalized interviews via the online and mobile banking platforms. The goal was to engage these customers and help them find solutions to retain their deposits within the bank.

Key Insights

Micronotes discovered that 54% of these customers typically withdrew their deposits within 90 days, if not contacted. By engaging with them promptly, the bank aimed to retain these significant deposits.

Campaign Results (March 1 – May 7, 2024)

• Leads Generated:
  • 43 warm leads
    • 32 for Certificates of Deposit (CDs), 11 for investment opportunities with LPL Financial advisors
  • 31 cool leads
    • 24 for CDs, 7 for investment opportunities
• Conversions:
  • Warm Leads: Over $1.1 million in new CD purchases
  • Cool Leads: Over $500K in new CD purchases

The campaign’s success in generating leads and converting them into new CD purchases highlights the effectiveness of Micronotes’ solution in retaining customer deposits.

Detailed Engagement Breakdown

• Warm Leads:
  • 28 customers requested email information on CDs
  • 4 customers preferred a call about CDs
  • 10 customers asked for more information on investments and were sent a link
  • 1 customer requested a call about investments
  • Additionally, 24 customers were interested in CDs but declined further contact, and 7 customers were interested in investments but did not want to be contacted

Conversion Metrics

• Warm Leads:
  • 9 accounts without prior CDs now hold a total of $1.055 million in CDs
  • 1 account increased its CD balance by $44,000
• Cool Leads:
  • 3 accounts without prior CDs now hold a total of $525,000 in CDs
  • 1 account increased its CD balance by $31,000

These conversion metrics demonstrate the tangible impact of the campaign on the bank’s deposit retention efforts. By converting warm and cool leads into substantial CD balances, the bank successfully retained significant funds, more than half of which would otherwise have been withdrawn.

User Experience

The campaign’s interface within mobile banking was designed for seamless interaction. Customers could choose options like ‘Call me’, ‘Email me’, and ‘Not now’, each triggering specific follow-up actions by branch managers. This intuitive design ensured a smooth user experience and effective engagement. The ability to interact with the campaign through familiar digital channels made it easy for customers to respond and engage with the bank’s staff and products.

Verdict

The Exceptional Deposit Campaign effectively demonstrated the power of Micronotes’ data-driven engagement strategy in retaining deposits, one of hundreds of powerful use-cases. By retaining significant deposits and fostering deeper customer relationships, the campaign showcased how analytics and personalized engagement can drive positive outcomes for community banks.

Community banking providers looking to enhance their deposit retention strategies can benefit significantly from Micronotes’ innovative solutions. By leveraging advanced analytics and proactive engagement, banks can stay ahead of potential withdrawals and build stronger, more loyal customer relationships.

Call to Action

Discover how Micronotes can transform your deposit retention strategies. Contact us today or visit our website for a detailed overview and to schedule a demonstration of our innovative solutions. Let us help you turn potential challenges into opportunities for growth and customer loyalty.

By Xav Harrigin-Ramoutar

In an era where the banking landscape is increasingly competitive, the emergence of big data-driven marketing has become a beacon for community banks seeking proven strategies to connect with their customers and prospects. This approach, characterized by its use of detailed analytics to inform marketing decisions, is transforming how banks interact with their clientele, moving away from generic, one-size-fits-all campaigns to highly financially personalized communications. Such a shift towards personalization is not just a trend but a reflection of changing consumer expectations. Customers now desire services that cater specifically to their needs, making personalized marketing an indispensable strategy for banks aiming to foster loyalty and drive engagement.

What is Micronotes’ Growth Opportunities Analysis?

Micronotes’ Growth Opportunities Analysis represents a free cutting-edge tool specifically crafted to meet the unique marketing challenges faced by community banks and credit unions. This powerful tool leverages the latest in data analytics to dive deep into the 230MM credit records Micronotes processes weekly to turn raw information into bank of credit union specific insights. Its primary function is to identify untapped opportunities within the community financial institution’s operating footprint, enabling targeted, personalized marketing campaigns that resonate with individual customers’ current financial situation.

Key features of Micronotes’ Growth Opportunities Analysis include its advanced segmentation algorithms, which categorize customers based on their credit profile and borrowing costs. The analysis features stand in stark contrast to traditional market analyses, which often rely on broad demographic information and historical data without the same depth of credit and financial consumer insight or predictive power.

The target users of this technology are community financial institutions (FIs) that lack the vast resources of larger institutions but still need to compete effectively in a data-rich and digital-first marketplace. For these banks and credit unions, Micronotes offers a way to level the playing field, providing each with sophisticated marketing intelligence and campaign execution automation that can enhance customer engagement, increase retention, and drive growth.

Why Micronotes for Community Banking?

Micronotes stands out as an invaluable asset for community banks, primarily due to its capacity to profoundly enhance marketing personalization, efficiency, and ultimately, drive loan, deposit, and new accountholder growth. The technology enables community financial institutions to not only recognize but also act on the unique financial needs and preferences of each accountholder or near-branch prospect. By leveraging data-driven insights, Micronotes allows banking providers to design and deliver firm offers of credit that are highly tailored to individual prospects. This level of personalization ensures that marketing efforts are not just seen, but resonate, fostering a deeper sense of connection and satisfaction with customers and prospects alike.

The efficiency of marketing operations is significantly improved with Micronotes. Traditional marketing approaches often involve a shotgun approach, with resources spread thinly across various campaigns with uncertain outcomes. Micronotes, however, utilizes predictive analytics to identify the most promising opportunities for engagement, allowing banks to allocate their marketing resources more strategically. This targeted approach minimizes waste and maximizes the impact of every marketing dollar spent, ensuring that banks get the best possible return on their investment.

Moreover, Micronotes plays a pivotal role in driving growth for community banking providers. By facilitating more personalized and efficient marketing campaigns, it not only enhances customer engagement but also substantially increases the likelihood of upselling and cross-selling opportunities. Customers who feel understood and valued are more likely to expand their relationship with their banking provider, leading to increased loyalty and higher lifetime value.

How Micronotes’ Growth Opportunity Analysis Works: A Closer Look

Micronotes revolutionizes the way community banks connect with potential customers by harnessing the power of Experian’s extensive datasets. This innovative approach prioritizes the analysis of external data to identify and engage with individuals most likely to benefit from personalized banking services, ensuring that marketing efforts are both targeted and effective.

Harnessing Experian Data: The foundation of Micronotes’ strategy lies in its use of Experian data, a robust repository of financial behavior, preferences, and creditworthiness. This data enables Micronotes to paint a detailed picture of potential customers or members, identifying those whose financial goals and needs align with the services offered by community banking providers. 

Segmentation and Precision Targeting: With insights derived from Experian data, Micronotes segments the market, pinpointing individuals who are not just in the vicinity of a community FI but also likely to engage with specific financial products or services. This segmentation process allows for the creation of personalized marketing messages, designed to resonate deeply with the targeted audience. The precision of this targeting strategy ensures that marketing efforts are not wasted on uninterested parties, but directed towards those with a demonstrated interest or need.

Localizing Offers: Central to Micronotes’ methodology is the localization of its marketing efforts. By focusing on potential customers within a specific geographic area, Micronotes enables community FIs to tailor their offerings to the community they serve. This localized approach not only increases the relevance of marketing messages but also bolsters the likelihood of attracting accountholders who prefer banking with institutions that understand and cater to their community’s unique financial landscape.

The Value Proposition of Data-Driven Marketing in Banking

In their report, “Getting personal: How banks can win with consumers,” McKinsey & Company’s Ferreira et al. (2022) provide compelling evidence for the transformative power of data-driven marketing in the banking industry. The report reveals a stark reality: only 8% of banks have harnessed predictive insights from machine learning to inform their marketing campaigns, underscoring a significant underutilization of available technology. Moreover, the analysis highlights a broader organizational challenge, noting that just 16% of banks have standardized protocols for algorithm development, which is essential for effective data-driven marketing. The success stories cited in the report, where banks embracing a unified approach to analytics have seen a 5 to 15% increase in revenue from their campaigns, serve as a clarion call. This shift not only propels marketing efficiency and customer engagement but also underlines the critical need for banks to adopt integrated, data-centric strategies to stay competitive and meet evolving customer expectations.

Empowering Growth: The Strategic Leap Towards Personalized Banking

Micronotes’ Growth Opportunities Analysis stands as a pivotal innovation for community banks, promising to redefine their marketing strategies through deep, data-driven insights and personalized accountholder and prospect engagement. By harnessing the power of advanced analytics and Experian data, Micronotes enables banks to unlock new growth avenues, ensuring marketing efforts are not only efficient but also highly relevant and targeted. For community banking CEOs, adopting Micronotes is not just an upgrade—it’s a strategic pivot towards a future where personalized, data-informed interactions foster stronger customer relationships and drive sustainable growth. The path forward is clear: embracing Micronotes is embracing the future of community banking, where every marketing decision is empowered by insight and every customer interaction is an opportunity to deepen connections.

Leap into the future with a few key strokes, order your growth analysis here.

By Xav Harrigin-Ramoutar

The Challenge of Retaining Significant Customer Deposits

In the ever-changing landscape of banking, a prominent challenge stands out: effectively retaining and managing large customer deposits. These deposits often represent crucial moments in clients’ lives, making them key touchpoints for banks. Traditional engagement and retention methods, however, are increasingly falling short, leading to missed opportunities and potential erosion of trust. This scenario underscores the need for a transformative solution that redefines customer engagement and deposit retention in banking.

Understanding the Customer’s Journey

At the core of our story are the bank customers, each navigating significant life events that often coincide with large deposits. These moments, whether it’s selling a home, preparing for a wedding, or welcoming a new family member, are not just financial transactions; they’re personal milestones. For banks, these instances are more than deposit entries; they represent a critical opportunity to connect, support, and grow with their customers. Embracing a customer-centric approach in banking means understanding and empathetically responding to these needs, turning routine financial interactions into meaningful relational touchpoints.

The Inefficiency in Traditional Banking Methods

The banking industry faces a critical problem: the inefficiency in retaining significant customer deposits. Traditional methods are proving inadequate, lacking the personalization and timeliness needed to effectively engage customers during these pivotal times. This inefficiency not only risks the loss of substantial funds but also misses the opportunity to deepen customer relationships, a key aspect for long-term success in the banking sector.

Introducing Micronotes Cross-Sell: Exceptional Deposits

Enter Micronotes Cross-Sell, Exceptional Deposits, the guiding solution in this narrative. This tool is designed specifically for the banking sector to address the challenge of deposit retention. It automates the detection of statistically exceptional deposits, signaling key customer life events, and acts as a bridge for personalized and timely interactions between banks and their customers. This not only facilitates the retention of significant deposits but also nurtures a deeper, more meaningful banking relationship tailored to each customer’s unique journey.

Seamless Integration and Strategic Engagement

The plan for implementing Micronotes Cross-Sell is straightforward yet impactful. Banks can integrate this technology seamlessly into their existing systems, enabling the automatic detection of significant customer deposits. Once identified, the platform facilitates targeted, relevant engagements, ensuring communications are not only timely but also resonate with the customer’s current needs and life events. This strategic approach enhances deposit retention and strengthens customer loyalty, turning routine banking interactions into opportunities for deepened, lasting relationships.

The High Stakes of Deposit Retention

The stakes are high in the banking sector when it comes to deposit retention. Failure to adopt a proactive, personalized approach can lead to significant deposit losses. Banks risk losing up to half of their large deposits to competitors within just 90 days, affecting liquidity and eroding long-term customer trust and loyalty. Inaction in this dynamic market could mean missing crucial opportunities to strengthen customer relationships and secure and expand core deposits.

A Success Story: The Power of Personalized Engagement

A testament to the effectiveness of Micronotes Cross-Sell is a success story from a participating bank. A customer, initially engaged in basic banking services, experienced a major life event leading to a substantial deposit. Leveraging Micronotes’ targeted approach, the bank immediately identified and responded to this event, resulting in the customer expanding their relationship with the bank, including investment services. This story exemplifies the power of personalized, timely intervention in transforming standard banking relationships into comprehensive, mutually beneficial partnerships.

Conclusion: Setting a New Standard in Banking

In conclusion, the adoption of Micronotes Cross-Sell and its exceptional deposits feature represents a pivotal step towards redefining deposit retention and customer engagement in banking. It’s a move towards understanding and catering to the evolving needs of customers, especially during significant life events. Banks that embrace this approach will not only safeguard their financial interests but also build stronger, more loyal customer relationships, setting a new standard in the banking experience.

By Xav Harrigin

The rapid ascent of artificial intelligence, particularly platforms like ChatGPT, has reshaped the financial landscape. These tools have become go-to resources for many seeking financial product recommendations.  However, while they offer instant responses and convenience, they often lack the depth and personal connection inherent to community banks. These traditional institutions, with their rich history, competence, and personal touch, stand uniquely positioned to offer tailored financial advice, especially when enhanced with fintech tools like Micronotes’ Exceptional Deposits™capability.

The Power of Community Banks

Community banks have long been the pillars of local economies. Their deep roots in the communities they serve have allowed them to offer financial services tailored to the unique needs of their clientele. Some of their standout strengths include:

• Personal Touch: Unlike larger financial institutions, community banks have always prioritized individual needs. They take the time to understand each customer’s unique financial journey, ensuring that every interaction is meaningful and beneficial.
• Local Insights: Their intrinsic knowledge of local markets, trends, and community needs sets them apart from larger banks. This local expertise allows them to offer financial solutions that are truly in line with the aspirations and challenges of their customers.
• Trust Building: Through years of dedicated service, community banks have cultivated unparalleled trust and loyalty among their clientele. This trust is not just built on financial transactions but on genuine relationships that have stood the test of time.

Enhancing Customer Experience in Community Banks

In an era where customer expectations are constantly evolving, community banks must find innovative ways to enhance their service offerings without losing their essence. Some strategies include:

• Digital Integration: The adoption of fintech tools can provide a competitive edge. For example, Micronotes’ Exceptional Deposits capability automatically spots statistically exceptional deposits and instantly starts a digital conversation with the depositor in mobile banking to connect him/her with a banker during what is very likely to be a major life event. It’s helpful that the conversation may reduce the 50% probability that the deposit leaves the bank in 90 days. By integrating such tools, community banks can offer a seamless blend of traditional banking with modern technological speed and convenience.
• Educational Initiatives: Financial literacy is crucial in today’s complex financial landscape. By hosting workshops and digital education on financial literacy, community banks can empower their customers, fostering a deeper sense of trust and transparency.
• Loyalty: Reward programs, cashback offers, and special interest rates can enhance customer retention and deepen engagement. Such schemes not only benefit the customers but also reinforce the bank’s commitment to their well-being.
• Financial Health Reviews: Regular check-ins with customers to discuss their financial health, future goals, and potential challenges can solidify the trust and loyalty that community banks are known for.

The Future of Financial Advisory

The realm of financial advisory is undergoing a rapid transformation, driven by both technology and changing customer expectations:

• Tech Collaborations: To stay ahead of the curve, community banks are forging strategic partnerships with tech firms like Micronotes.ai. These collaborations aim to amplify their digital offerings, ensuring that customers get the best of both worlds.
• Hybrid Advisory Model: The future of financial advisory will likely be a blend of AI insights and human understanding. While AI can provide quick, data-driven insights, the personal touch, context, and understanding of community banks remain irreplaceable.
• Regulatory Focus: As technology becomes more integral to finance, regulatory bodies are introducing new guidelines to ensure data protection, ethical AI practices, and overall customer safety. Staying updated with these regulations will be crucial for community banks to maintain their reputation and trustworthiness.

Conclusion

The financial sector is at a crossroads. On one hand, AI platforms like ChatGPT offer unparalleled speed and efficiency. On the other, community banks, with their deep connections, local insights, and trust-building capabilities, offer a warmth and context depth that technology alone cannot replicate. The key lies in integration. By embracing technology, offering personalized services, and maintaining their customer-centric approach, community banks can navigate the challenges of the digital age. The future holds immense potential for those institutions that are willing to adapt, innovate, and above all, stay true to their roots.

By Xav Harrigin

In today’s dynamic banking ecosystem, the significance of deposit retention is paramount. As underscored by a December 2022 article from American Banker on deposit competition, the year 2023 has seen a renewed emphasis on deposit competition. This resurgence highlights the pivotal role of deposits in determining a bank’s service quality, fostering customer trust, and ensuring economic stability. Deposits are more than just numbers on a balance sheet; they provide the essential liquidity for daily operations and loan funding and stand as a testament to a bank’s ability to nurture customer loyalty. Furthermore, a piece titled “How To Prioritize Deposit-Gathering in 2023” from Forbes accentuates that the upcoming years will see banks and credit unions racing to secure deposits, making retention strategies a more cost-effective approach than acquiring new customers.

Parallel to the urgency of deposit retention is the strategic importance of guiding customers through significant life events. These events, be it home purchases, entrepreneurial endeavors, or personal milestones, pose both challenges and opportunities. Banks that proactively address the financial needs stemming from such events not only build deeper relationships but also mitigate the risk of customer churn. In this context, assisting customers transcends mere transactional interactions. It becomes a manifestation of empathy, understanding, and a commitment to being a customer-centric institution in a fiercely competitive market.

Amidst this backdrop, Micronotes unveils its innovative feature, Exceptional Deposits™, offering financial institutions a strategic edge. Exceptional Deposits™ is a game-changing tool that empowers banks to identify and capitalize on deposit retention opportunities. By diligently monitoring customer account balances, it spots significant deviations from regular balance patterns. To illustrate, for every 1,000 customers, there’s a potential of $1,000,000 in large at-risk deposits, given that about 1% of accountholders have a balance that is about $100,000 greater than their average balance over the previous 5 periods.

The feature is replete with benefits:

• Dynamic Balance Monitoring: It keeps a vigilant eye on checking and savings account balances.
• Opportunity Identification: Any balance surge is an invitation to understand a customer’s life phase and extend timely assistance.
• Engaging Customer Interaction: Identified customers encounter a bespoke interview on their digital banking platforms.
• Proactive Customer Outreach: The tool enables banks to actively engage customers, particularly those navigating significant life transitions.
• Enhanced Communication Channels: Micronotes also offers email and SMS deposit and investment product information delivery options for amplified outreach.

Micronotes has adeptly integrated Exceptional Deposits™ into its Campaign Manager. Once activated, it operates autonomously, from balance monitoring to customer interview initiation and lead delivery to the front lines.

Customer engagement is more than digital clicks. Responses to prompts like “Call Me”, “Learn More”, or “Share now” trigger an immediate lead email to a designated banker, ensuring timely addressal of customer needs.

In conclusion, Exceptional Deposits™ is a beacon in the banking sector, arming financial institutions with the tools to not just retain their deposit base by helping customers and members through major life events. For those keen on redefining deposit retention and growth, Exceptional Deposits™ paves the way. For deeper insights or queries, connect with Micronotes.ai at [email protected].

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.”

In the previous two articles, we’ve discussed strategies for growing deposits from the existing customer/member base. It’s now time to look outside the financial institution for new deposits and beyond traditional advertising practices.

One of the advantages of working with a lot of financial institutions is the ability to overcome data scarcity problems that enable the use of algorithmic techniques that have historically been confined to larger financial institutions with tens of millions of customer records.  For example, a financial institution with 25,000 customers and a 10% annual attrition rate has to spend marketing money to replace 2,500 customers per year.  Let’s further assume that only 20% of those lost customers are profitable, that means that only 500 of those lost customers have desirable characteristics for new account acquisition.  That’s just not a large enough sample to build a robust lookalike audience in most major social media sites (e.g. Meta), which require on the order of 5,000 records to build a robust lookalike audience for target marketing.

Why is the ability to build a lookalike audience important in the quest for new customers?  Answer: Because customer/member acquisition cost and the quality of those acquisitions matter.  Lookalike audiences are important because they allow a desirable audience to be defined using one set of attributes (e.g. deposit balances, credit scores, profitability), and then find a similar and desirable audience using different attributes (e.g. interests, group membership, political affiliation).

These ideas come together into a powerful acquisition strategy when aggregated data sets containing tens of millions of customer deposit records are used to create a seed or source audience from which the major social media platforms can build a robust lookalike audience.

For example, let’s say a financial institution’s operating footprint is 25 counties across 2 states.  And that financial institution wants to acquire deposit customers who demonstrate the capacity to make large deposits into the bank as shown in Figure 1.

Figure 1 – Anomaly large depositors make deposits that are far above their average deposit balance over previous periods.

The financial institution knows who these people are but, unfortunately, there are only 95 of them in the database; far below the threshold to build a robust lookalike audience.  However, for Micronotes, this is a soluble problem because we can find about 10,000 anomaly large depositors in our aggregated client database.  Once those 10,000 records are published as the source or seed audience for the lookalike audience, the remaining work in creating a target audience is to impose the requirement that lookalikes be confined to the two states and 25 counties in which the financial institution operates.  Then, of course, a compelling offer must be made to convert those lookalikes into customers or members.

In future articles, we’ll discuss the performance of lookalike campaigns and how they enable small financial institutions to fully compete with larger financial institutions in new customer/member acquisition.