Appier predicting customer behavior in financial services shared by worldline technology

This white paper addresses some of the questions marketers in the financial services sector have and illustrates how AI can help analyze data, make precise predictions and offer insights

How Artificial Intelligence and Data Science

Enable Better Marketing and Higher ROI

White paper September 2019

The last decade has seen a swift uptake in digital technology by

consumers, and the financial services sector is no different

Although many traditional financial institutions have already

started their digital transformation, which has equipped them

with the data to better understand their customers, so have

organizations in other fields¹ The disruptors and challengers in

the market, particularly those from non-finance sectors such as Baidu, Tencent and Grab, as well as giants Google and Facebook, also have access to customer data – but from different digital touchpoints

Marketing in the financial services sector has changed as well, with a personalized approach considered more effective than broad brushstrokes The new breed of marketing recognizes that customers want to make educated decisions about their money, but the information must

be timely, relevant, trustworthy and accessible The challenge for marketers is to build a meaningful relationship with customers and keep them informed so their brand is top of mind when the right moment to engage with consumers arises, whether that is to capture a new client or renew an existing relationship

Artificial intelligence (AI) helps marketers create a holistic view of their potential customers by collating and analyzing information from a broad spectrum of data points By identifying intent, marketers can then segment users, predict behavior and expand a business’ reach through lookalike audiences

This white paper addresses some of the questions marketers in the financial services sector have and illustrates how AI can help analyze data, make precise predictions and offer insights that enable marketers to create more effective strategy and campaigns

Disruptors & Challengers

1 https://www.mckinsey.com/~/media/McKinsey/Industries/Financial%20Services/Our%20Insights/Reaching%20Asias%20digital%20banking%20customers/

Asias-digital-banking-race-WEB-FINAL.ashx

The APAC fintech market will be worth US$72 billion by

20206 and the rising adoption of digital payment systems gives financial institutions and challenger service platforms unprecedented insights into their customers

What this means for marketers is a vast amount of data to sift through and find patterns in to better target existing customers, determine lookalike clients and predict their behavior This is where AI will come to the fore A recent Forrest Study stated that already 51% of the financial services firms in APAC had adopted AI tools in 2018, while 27% were planning to do so in the next 12 months7

The convergence between incumbent financial institutions with fintech, telecommunications and e-commerce is also a trend to watch A recent survey of executives from ASEAN and Hong Kong financial institutions revealed that 77.2% believed there would be more convergence in the space¹¹ Players like Tencent, which owns China’s social media and messaging app WeChat and its payment system WeChat Pay, and China Pacific’s partnership with Baidu to create an online auto insurance business¹², have shown what convergence might look like in the social and e-commerce space It also hints at the significant advantages they hold in data aggregation and analytics capability

Consumer expectations have also changed, with ‘on-demand’ requests for information and services becoming the norm This reflects an emerging trend to capture the micro-moment –

the reflexive point at which a consumer turns

to a device to find, learn or buy something –

an important battle to win¹³ While financial marketers have historical data to help them predict consumer behavior and ensure they present timely information, ‘a-commerce’, the ability to purchase from ‘anywhere’, including social media platforms, will have the advantage of drawing from a different, more dynamic dataset¹4

The main challenge for the financial services industry in the region also offers plenty of opportunity Different maturity levels across Asian countries with diverse economies and varying sophistication of infrastructure may appear frustrating at first but, in effect, digitization

is well accepted across the region and individual countries are simply at different stages of transitioning

Those leading the fintech evolution, such as China, Singapore and South Korea, have influence over less mature economies, and this could give marketers insights into customers coming from societies where many citizens do not have bank accounts, such as Indonesia, Thailand, The Philippines and Vietnam, who are making the leap to digital-only financial services¹0 The kind of education marketers need to impart in less financially mature markets will drive trust factors and may need to accommodate technological as well as financial literacy

The top five biggest banks in the world are located in Asia, and four of those belong to China²

Additionally, the banking market in emerging Asia-Pacific (APAC) countries is the fastest

growing in the world While ‘big’ and ‘growing’ are important factors to provide scope for

financial services marketers, it is in the fine print that they will find the gold – these markets are

driven by an increasing focus on digitization

Early adopters include China and India, where mistrust due to counterfeit banknotes hastened

the uptake of cashless payment systems³ Other countries such as Japan and Malaysia have

adopted boosting digital payments as government and national bank policy4 Greenfield

markets like The Philippines, where fewer than 35% of people over the age of 15 have a bank

account5, are also ripe for digital transformation, bypassing traditional financial institutions

This also leaves the markets open for new digital-only lenders, including peer-to-peer platforms

such as Funding Societies and CreditEase

Digital adoption in banking

Early adopters:

China, India Markets that adopteddigital payments:

Japan, Malaysia

Greenfield markets:

The Philippines

2 https://www.forbes.com/sites/peterpham/2018/01/16/why-is-asia-home-to-the-worlds-biggest-banks/#641abcd733fe

3 https://issuu.com/adellegrisaffe/docs/rfimedia-tabm-august_2018

4 https://www.japantimes.co.jp/news/2018/12/03/reference/japan-grudgingly-heads-toward-cashless-society/#.XAdT5ydoRj1

5 https://issuu.com/adellegrisaffe/docs/rfimedia-tabm-august_2018

The APAC fintech market will be worth US$72 billion by

20206 and the rising adoption of digital payment systems gives financial institutions and challenger service platforms unprecedented insights into their customers

What this means for marketers is a vast amount of data to sift through and find patterns in to better target existing customers, determine lookalike clients and predict their behavior This is where AI will come to the fore A recent Forrest Study stated that already 51% of the financial services firms in APAC had adopted AI tools in 2018, while 27% were planning to do so in the next 12 months7

The convergence between incumbent financial institutions with fintech, telecommunications and e-commerce is also a trend to watch A recent survey of executives from ASEAN and Hong Kong financial institutions revealed that 77.2% believed there would be more convergence in the space¹¹ Players like Tencent, which owns China’s social media and messaging app WeChat and its payment system WeChat Pay, and China Pacific’s partnership with Baidu to create an online auto insurance business¹², have shown what convergence might look like in the social and e-commerce space It also hints at the significant advantages they hold in data aggregation and analytics capability

Consumer expectations have also changed, with ‘on-demand’ requests for information and services becoming the norm This reflects an emerging trend to capture the micro-moment –

the reflexive point at which a consumer turns

to a device to find, learn or buy something –

an important battle to win¹³ While financial marketers have historical data to help them predict consumer behavior and ensure they present timely information, ‘a-commerce’, the ability to purchase from ‘anywhere’, including social media platforms, will have the advantage of drawing from a different, more dynamic dataset¹4

The main challenge for the financial services industry in the region also offers plenty of opportunity Different maturity levels across Asian countries with diverse economies and varying sophistication of infrastructure may appear frustrating at first but, in effect, digitization

is well accepted across the region and individual countries are simply at different stages of transitioning

Those leading the fintech evolution, such as China, Singapore and South Korea, have influence over less mature economies, and this could give marketers insights into customers coming from societies where many citizens do not have bank accounts, such as Indonesia, Thailand, The Philippines and Vietnam, who are making the leap to digital-only financial services¹0 The kind of education marketers need to impart in less financially mature markets will drive trust factors and may need to accommodate technological as well as financial literacy

The top five biggest banks in the world are located in Asia, and four of those belong to China²

Additionally, the banking market in emerging Asia-Pacific (APAC) countries is the fastest

growing in the world While ‘big’ and ‘growing’ are important factors to provide scope for

financial services marketers, it is in the fine print that they will find the gold – these markets are

driven by an increasing focus on digitization

Early adopters include China and India, where mistrust due to counterfeit banknotes hastened

the uptake of cashless payment systems³ Other countries such as Japan and Malaysia have

adopted boosting digital payments as government and national bank policy4 Greenfield

markets like The Philippines, where fewer than 35% of people over the age of 15 have a bank

account5, are also ripe for digital transformation, bypassing traditional financial institutions

This also leaves the markets open for new digital-only lenders, including peer-to-peer platforms

such as Funding Societies and CreditEase

Moving Towards AI

AI adoption among financial services firms in APAC

6 https://ww2.frost.com/news/press-releases/asia-pacific-fintech-market-reach-us72-billion-2020-finds-frost-sullivan/

7 https://www.appier.com/asias-financial-services-industry-embraces-ai-led-future/

8 https://www.ey.com/Publication/vwLUAssets/EY-white-paper-driving-digital-into-the-heart-of-asias-financial-services-industry-final/$File/

EY-white-paper-driving-digital-into-the-heart-of-asias-financial-services-industry-final.pdf

9 https://www.gartner.com/en/newsroom/press-releases/2018-02-19-gartner-says-25-percent-of-customer-service-operations-will-use-virtual-customer-assistants-by-2020

An increasing number of financial services customers will interact with chatbots during their on-boarding in the near future, according to a survey of ASEAN and Hong Kong financial institutions More than 30% of respondents predicted that AI and chatbots would be the top technology influencer for financial services over the next 12-18 months8 Moreover, Gartner states that by 2020, 25% of all online customer service operations will use some sort of assistive technology such as chatbots9

have adopted were planning to do so

in the next 12 months

The APAC fintech market will be worth US$72 billion by

20206 and the rising adoption of digital payment systems gives financial institutions and challenger service

platforms unprecedented insights into their customers

What this means for marketers is a vast amount of data to sift through and find patterns in to better target existing customers, determine lookalike clients and predict their

behavior This is where AI will come to the fore A recent Forrest Study stated that already 51% of the financial

services firms in APAC had adopted AI tools in 2018, while 27% were planning to do so in the next 12 months7

The convergence between incumbent financial institutions with fintech, telecommunications and e-commerce is also a trend to watch A recent survey of executives from ASEAN and Hong Kong financial institutions revealed that 77.2% believed there would be more convergence in the space¹¹ Players like Tencent, which owns China’s social media and messaging app WeChat and its payment system WeChat Pay, and China Pacific’s partnership with Baidu to create an online auto insurance business¹², have shown what convergence might look like in the social and e-commerce space It also hints at the significant advantages they hold in data aggregation and analytics capability

Consumer expectations have also changed, with ‘on-demand’ requests for information and services becoming the norm This reflects an emerging trend to capture the micro-moment –

the reflexive point at which a consumer turns

to a device to find, learn or buy something –

an important battle to win¹³ While financial marketers have historical data to help them predict consumer behavior and ensure they present timely information, ‘a-commerce’, the ability to purchase from ‘anywhere’, including social media platforms, will have the advantage of drawing from a different, more dynamic dataset¹4

The main challenge for the financial services industry in the region also offers plenty of opportunity Different maturity levels across Asian countries with diverse economies and varying sophistication of infrastructure may appear frustrating at first but, in effect, digitization

is well accepted across the region and individual countries are simply at different stages of transitioning

Those leading the fintech evolution, such as China, Singapore and South Korea, have influence over less mature economies, and this could give marketers insights into customers coming from societies where many citizens do not have bank accounts, such as Indonesia, Thailand, The Philippines and Vietnam, who are making the leap to digital-only financial services¹0 The kind of education marketers need to impart in less financially mature markets will drive trust factors and may need to accommodate technological as well as financial literacy

The top five biggest banks in the world are located in Asia, and four of those belong to China²

Additionally, the banking market in emerging Asia-Pacific (APAC) countries is the fastest

growing in the world While ‘big’ and ‘growing’ are important factors to provide scope for

financial services marketers, it is in the fine print that they will find the gold – these markets are

driven by an increasing focus on digitization

Early adopters include China and India, where mistrust due to counterfeit banknotes hastened

the uptake of cashless payment systems³ Other countries such as Japan and Malaysia have

adopted boosting digital payments as government and national bank policy4 Greenfield

markets like The Philippines, where fewer than 35% of people over the age of 15 have a bank

account5, are also ripe for digital transformation, bypassing traditional financial institutions

This also leaves the markets open for new digital-only lenders, including peer-to-peer platforms

such as Funding Societies and CreditEase

10 https://www.ey.com/Publication/vwLUAssets/EY-white-paper-driving-digital-into-the-heart-of-asias-financial-services-industry-final/$File/

EY-white-paper-driving-digital-into-the-heart-of-asias-financial-services-industry-final.pdf

The APAC fintech market will be worth US$72 billion by

20206 and the rising adoption of digital payment systems gives financial institutions and challenger service

platforms unprecedented insights into their customers

What this means for marketers is a vast amount of data to sift through and find patterns in to better target existing customers, determine lookalike clients and predict their

behavior This is where AI will come to the fore A recent Forrest Study stated that already 51% of the financial

services firms in APAC had adopted AI tools in 2018, while 27% were planning to do so in the next 12 months7

The convergence between incumbent financial institutions with fintech, telecommunications and e-commerce is also a trend to watch A recent survey of executives from ASEAN and Hong Kong financial institutions revealed that 77.2% believed there would be more convergence in the space¹¹ Players like Tencent, which owns China’s social media and messaging app WeChat and its payment system WeChat Pay, and China Pacific’s partnership with Baidu to create an online auto insurance business¹², have shown what convergence might look like in the social and e-commerce space It also hints at the significant advantages they hold in data aggregation and analytics capability

Consumer expectations have also changed, with ‘on-demand’ requests for information and services becoming the norm This reflects an emerging trend to capture the micro-moment –

the reflexive point at which a consumer turns

to a device to find, learn or buy something –

an important battle to win¹³ While financial marketers have historical data to help them predict consumer behavior and ensure they present timely information, ‘a-commerce’, the ability to purchase from ‘anywhere’, including social media platforms, will have the advantage of drawing from a different, more dynamic dataset¹4

The main challenge for the financial services industry in the region also offers plenty of opportunity Different maturity levels across Asian countries with diverse economies and varying sophistication of infrastructure may appear frustrating at first but, in effect, digitization

is well accepted across the region and individual countries are simply at different stages of transitioning

Those leading the fintech evolution, such as China, Singapore and South Korea, have influence over less mature economies, and this could give marketers insights into customers coming from societies where many citizens do not have bank accounts, such as Indonesia, Thailand, The Philippines and Vietnam, who are making the leap to digital-only financial services¹0 The kind of education marketers need to impart in less financially mature markets will drive trust

factors and may need to accommodate technological as well as financial literacy

The top five biggest banks in the world are located in Asia, and four of those belong to China²

Additionally, the banking market in emerging Asia-Pacific (APAC) countries is the fastest

growing in the world While ‘big’ and ‘growing’ are important factors to provide scope for

financial services marketers, it is in the fine print that they will find the gold – these markets are

driven by an increasing focus on digitization

Early adopters include China and India, where mistrust due to counterfeit banknotes hastened

the uptake of cashless payment systems³ Other countries such as Japan and Malaysia have

adopted boosting digital payments as government and national bank policy4 Greenfield

markets like The Philippines, where fewer than 35% of people over the age of 15 have a bank

account5, are also ripe for digital transformation, bypassing traditional financial institutions

This also leaves the markets open for new digital-only lenders, including peer-to-peer platforms

such as Funding Societies and CreditEase

11 https://www.ey.com/Publication/vwLUAssets/EY-white-paper-driving-digital-into-the-heart-of-asias-financial-services-industry-final/$File/

EY-white-paper-driving-digital-into-the-heart-of-asias-financial-services-industry-final.pdf

12 https://www.ey.com/Publication/vwLUAssets/ey-2017-asia-pacific-insurance-outlook/%24FILE/ey-2017-asia-pacific-insurance-outlook.pdf

13 http://www.adnews.com.au/opinion/from-neo-banks-to-micro-moments-financial-marketing-trends-for-2019

14 http://info.microsoft.com/rs/157-GQE-382/images/EN-US-CNTNT-Report-2019-Finance-Trends.pdf

$

$

To promote a suite of complex banking, investment and insurance products in this environment presents an interesting problem for marketers: how to inform and educate consumers, and tailor products and services to their personal needs while remaining accessible 24/7? Data alone is not enough, marketers require a way to visualize and analyze that data to make better decisions

Key questions remain:

How to consolidate data into a single customer view?

The volume of data is not an issue The increasing digitization of payment systems and wholesale rejection of cryptocurrency¹5 across the region has ensured data collection from both immature and sophisticated markets The challenge is to collate data gathered from different sources, including websites, campaigns, apps, customer relationship management (CRM), API integration and more With data from such disparate sources, how can marketers extract any meaningful insights? Do their audiences act differently across devices? How do marketers know the right timing and right device to engage?

How to identify the right audience?

The financial services sector is not just for wealthy professionals; there are many different audiences for different services When is the best time for an insurance provider to target a new homeowner? How does

a business lender know if it’s worth approaching a micro business owner? And when will that real estate investor have spare capital for her next property?

15 https://issuu.com/adellegrisaffe/docs/rfimedia-tabm-feb2018

How to prevent churn?

Which customers are leaving the website, the mailing list, the app? Why are they leaving? How should financial services firms re-engage them?

How to expand the reach and find new customers?

Acquiring new customers is never easy, especially when the trust factor comes into play Who or what influences someone to bank with a certain institution? Which customers are a source of untapped potential, and how should organizations unlock them?

How to understand user intent?

Historical data can churn out probable behavior based on past actions, but AI looks at data more dynamically What behavior does a potential investor exhibit when they are looking for a wealth management advisor versus a self-managed option? How can a marketer tell the difference between a user who is educating themselves and investigating their options and one who is ready to apply for a mortgage?

How to predict user behavior?

How can marketers know which factors will have the most influence over whether users convert into clients or not? Is a user more likely to convert when she has just asked a question on an online wealth forum

or after she has read an article about Asia’s most successful investors? Demographics, past behavior and current context and circumstances need to be combined to make marketing hyper-relevant and predictive¹6

16 https://www.accenture.com/t20180219T081429Z w /us-en/_acnmedia/PDF-71/Accenture-Global-DD-GCPR-Hyper-Relevance-POV-V12.pdf

$

Big data has been kind to marketers in the recent past, but making sense of an ever-growing collection of information is currently one of their toughest challenges In finance, that data comes from both financial transactions performed by customers as well as the information they are seeking online with regard to financial services Today’s AI platforms have been developed

to unify data, provide predictive intelligence and assist with automation Combined, these AI functions will generate US$2.1 trillion in business value by 2021¹7

AI platforms like Appier’s Data Science Platform AIXON¹8 not only use historical data, such as transactions, previous campaign results and past user behavior, to develop patterns as an indicator of future behavior, but also transform this information to find new audiences and target them in a predictive way The more data marketers feed AI, the more accurate results it can produce, and the easier it is to address marketers’ questions and pain points Before running a campaign, marketers can also select datasets to focus on and preview likely results before deployment

Consolidate fragmented data sources

Many marketers are unable to truly leverage their customer data simply because they lack a single customer view that

is essential for marketing success AI-powered data science platforms merge customer data from different marketing and customer service channels, including owned channels (website, app, CRM and offline data) and external channels (web and app), into one place This offers a more holistic and comprehensive view of customers beyond their demographics, revealing their interests, habits and cross-screen behavior Marketers can then use these insights to create better targeted and better timed marketing campaigns that boost interest, engagement and conversion

17 http://info.microsoft.com/rs/157-GQE-382/images/EN-US-CNTNT-Report-2019-Finance-Trends.pdf

18 https://www.appier.com/en/product.html#aixonPlatform

The rapid digitization of the financial services sector and the increasing convergence of technology platforms to provide financial services give marketers an unprecedented amount

of data about their existing and potential customers This vast data bank requires a teller, however – one that will provide actionable insights to help marketers attract and retain customers AI platforms such as AIXON supports marketers to develop a more detailed understanding of users so they can be targeted with the appropriate campaign at different stages in the purchase cycle The power of AI and its analytical capabilities helps marketers deliver the right campaign at the right time to ensure every opportunity is golden

About AIXON

AIXON is a Data Science Platform that unifies and enriches existing customer data to help you better understand your audience and run AI models easily

to predict their future actions. 

Learn More Watch Video Case Studies

About Appier

Appier is a technology company that provides AI platforms to help enterprises solve their most challenging business problems Appier was established by a passionate team of computer scientists and engineers with expertise in AI, data analysis and distributed systems

Learn More

Find the right audience

A user doesn’t need to have been a customer – nor even have held a bank account – to be in an

organization’s potential market Advanced AI models can help track, unify and analyze

cross-screen behavior across multiple devices to identify potential customers

Consider Andy who has bought an ebook by a well-known entrepreneur, and later that day scans

online listings of properties with retail leases Perhaps he is also an active Alibaba customer

The data might also show that he has recently been made redundant from a well-paid job with

a large payout A small business lender might consider him an interesting prospect

Understand user intent and behavior

AI is also good at predicting a user’s next step by identifying where the customer is in the

purchase cycle Matching campaigns with customer readiness can save marketers’ time and

money A customer searching for more information on a type of insurance will respond well to a

content marketing push, for example, whereas another customer comparing specific products

is more than likely ready to interact with a chatbot to confirm a decision and apply

Expand with new customers

Creating a lookalike audience is not just about replicating CRM information AI finds invisible patterns that go beyond demographics and dive deep into habits and behavior, including combinations that may include keywords plus sites recently visited, and recent purchases

on non-finance-related websites As AI works across multiple channels and devices, it can help marketers tap into unrealized potential among lookalikes

Let's look at a building society in Singapore that wants to increase its share of the home loan market AI can create

a 'lookalike' audience based on mortgage data in the institution's CRM system, plus other data collected from external channels As an example, perhaps the leads most likely to convert had visited a particular shopping website in the month prior to visiting the institution’s, used the search term

‘what is conveyancing’ in the last five days and tried out the home loan calculator on the site before making contact AI finds hidden signals in the data to indicate potential borrowers that

do not need to be demographically similar to existing mortgagors to be ripe for conversion

Prevent churn

AI can also identify existing customers who display behavior that indicates they are about to churn This gives marketers a chance to use re-engagement tactics to lift their retention rate and convert potential losses into opportunities Consider Andy who hasn’t used his credit card for more than a month, when there are usually five regular deductions for bill payments in each cycle The bank can remind him of how a credit card is convenient for bill payments because it can help with cash flow to realign its value with his needs and desires, and then take steps to move him along the funnel again via personalized engagement

Marketers can also use AI to home in on spending habits and interests so they know exactly when a homeowner Jenny in Malaysia with a penchant for interior design is ready to think about refinancing her mortgage Perhaps she has just renewed her

subscription to the CreativeHome magazine and has recently scanned Houzz for the Best 15 Carpenters

in Malaysia – a sign that an extension or renovation

is on the horizon that will need to be funded by her existing loan

Create predictive audience segments

AI can also combine data in surprising ways By analyzing user intent and behavior, AI can create predictive segments from seemingly obscure demographic information, habits or interests outside of an organization’s own online environment, using data from offline sources or third-party data

For example, a Vietnamese man in his early 20s could be a potential client for his first bank account, and his recent review praising a restaurant for its good value meals might indicate he is becoming more serious about saving AI can create a segment like ‘Vietnamese man who is a foodie and likes sushi’

based on these thin threads of data Such actionable insights enable marketers to deploy the best campaign – including the right message, visuals, products and pricing – that is likely to resonate with their audience at the best time in order to entice a user to convert

A small business lender might consider him an interesting prospect

Buys an ebook by

an entrepreneur Views properties with retail leases online Alibaba customer Redundant from a well-paid job