Transcription:
Transforming Branch Location Retail Siting with the Power of Artificial Intelligence - How, Why, When and Where

Bill Klaproth (Host1):  When you've been searching for the right insight, advice and information on financial marketing, you know where to go, The Speakeasy. The exclusive source for financial marketing insights, with a shot of human, starring Kelly Hellickson and Hillary Reed from EmpowerFi. Strategy infused data-driven marketing solutions for financial institutions nationwide. And on this episode, Kelly Hellickson talks with Cory Albert about using artificial intelligence to determine the best location to build branches. Now here's your host Kelly Hellickson.

Kelly Hellickson (Host2): Hello. Thanks Bill. Super excited to be with you guys today. And today we have a really great guest, a fantastic partner of ours from Faraday, our artificial intelligence platform, Cory Albert. Cory, thank you so much for being with us today.

Cory Albert (Guest): Thanks, Kelly. Happy to be here.

Host2: Let's talk about branch retail citing and geographically speaking where should we build, where should we not build harnessing the power of artificial intelligence? What's the next normal for these branches?

Cory: Yeah, I think branch location and really is taking place there is becoming weirdly enough after everything that's going on, even more paramount, right as the world reopens and things are kind of turning back to normal or new normal, whatever that looks like here. The branch location for a lot of FIs can really determine what their next five to 10 years. looks like.

Host2: I think you're exactly right. We had Jenny Bengal from Momentum, a design build firm partner of ours out in Seattle. We had her on the last couple of episodes and we're really seeing an increase in traffic, an increase in flow rate because people have not been social for so long. And now, I think people are going to really dig back and kind of fall back to grassroots and going into branches to do the lion's share of their personal banking.

Cory: Right. And I think big part of that is not just where credit unions or FIs are looking to build and expand to, but also, what their existing brand strategy look like. Like today, obviously there's some set locations, but how do you drive more people into those locations that you already have and get those locations working more effectively on behalf of your members.

Host2: So, let's now talk about data insights and how can our data insights help enable these financial institutions to make smarter, better, more strategic branch citing decisions?

Cory: I mean, there's a lot of different strategies that I can employ, right from Faraday's approach and Kelly working with you and the team at EmpowerFi, we're starting to do a lot of cool things around really understanding population density of ideal members within a certain distance around whether it's existing branch locations or even starting to analyze future or nice to have locations as well, and looking at expansion opportunities comparing one location versus another. From a data perspective, all of that really starts around, what are your best members, most engaged members look like already. How do they interact with you all, whether that's in a physical setting or digital setting, and really how that applies towards branch and retail location strategies.

Host2: Yeah, that's fantastic. And that's a really great segue into something that we're really passionate about all of it, but I really feel that the artificial intelligence, behavioral and machine learning side of things that's the proof in the pudding, right. So, I know that we can harness the machine learning aspect to build those models like you're talking about. Let's find, tag and catalog your ideal members, your current members, and then let's go utilize the data, the insights, the machine learning. Let's utilize this tool to then seek out geographically speaking within your field of membership, where others that look like those perfect ideal loyal members reside, and then take a look at the clustering and see if propensity wise, the insights are there. The data's there, the proof shows that this is where we should build. Is that pretty accurate would you say?

Cory: Oh a hundred percent right. And it all starts with that data making sure we're doing the right analysis, since we're dealing with that ideal of member profile or groups of member profiles look like, right. And then really furthermore, from there, it's eliminating all of the guesswork. So allowing advanced models to key in on thousands and thousands of data points at that point to determine where that ideal location is.

Or, if it's around an existing location who those ideal people are around that area that have a high likelihood to come in and interact, whether it's current members and getting them to expand and further their relationship with the credit union or people that have yet to interact with that credit union in any way. We can use the data and apply those learnings to meet those outcomes.

Host2: That's fantastic. So, obviously those are those strategic benefits, right? Utilizing, harnessing the power of the data, making sure that we're on point in our location analysis, but also twofold, when we serve that output report up after we catalog and comb through the current membership, those insights are really going to be monumental to telling us and talking to us a bit about what the current membership at these organizations or customer base, if we're talking about a bank, what these current members and customers look like, and then to leverage what they want to see more of. Right? So that can translate into the interior of the branch and help with anything from everything, from marketing to merchandising to more, correct?

Cory: Yeah, for sure right? I kind of view it as two steps right? The first step is identifying and doing all the analysis to understand where that best location is. Second step is, you've gone through construction and opening and everything else. So now what, right? What are you going to further do with that data and the learning that you've been applied to, to build that branch in that spot and let's go out and use that learning to drive traffic and gain more of that desired outcome.

Host2: Yeah, that's perfect. Wonderful. So, in your opinion, or maybe propensity wise, when we talk about propensity models, Cory, how else could we utilize the data, the reports, personas? What are some buzz phrases or things that you're working with your credit union and bank clients on when we do talk about the power of artificial intelligence not just specific to where should we build, where should we not build, but anything else that you're hearing strategy-wise your folks are using on the AI front in order to gain membership in bank customers?

Cory: That's a funny question. Right? Because especially over the last year, a lot of initiatives have changed or strategies have evolved, right. It's one of those things that it's somewhat has a, it's a different answer for everyone we talked to right? But essentially overall, what we're seeing is some pretty common themes of people looking to either expand customer or member engagement. Right? So, rather than spending pretty heavy, intensive resources, both from a dollar amount in ad spend side of things, but also team resources to go out and find new members or customers. It's how do we better interact with and engage with the people that we're already working with?

Right? So, whether that's applying propensity models, to product recommendations or tailoring a digital experience to someone banking in an online platform, right, we can use that data to really expand how the FI communicates with its customers or members allowing them to tailor and personalize to a much higher degree what that interaction looks like. Now in that same breath, some of the other people we talked to, it is very much acquisition focused. So, along those same lines, it's using the data and the personalization to go out and send the right ad to the right person, right. Kind of being able to eliminate all of the noise that we know is out there in the financial space with whether it's similar products or similar organizations, really hone in on who that lead is, or potential lead is that's most likely to interact with an ad or a product, right. And go out and target those people directly.

Host2: That's fantastic. So, to paraphrase or to parlay rather off of your words, in one breath, we're talking about engagement, we're also talking about acquisition, but we've seen at EmpowerFi, Hillary and I have taken so many calls as of late folks don't even want to throw marketing dollars or ad spend at either of those. They're looking to just create awareness and they want to do it in such a way that they are able to differentiate themselves from the FI down the street, because let's face it, I mean, it's post pandemic, the next normal quote, unquote it's different. And I think it's even more challenging because it is more cutthroat right now.

So, we've seen a lot of awareness and we've done a lot of brands and secondary taglines as of recently, just because everybody wants to emphasize themselves as, hey, we want to be their premier financial institution and how do we do that? We have to connect. So, I think you're right. Engagement, awareness, acquisition and of course, inevitably personalization we have to, right.

Cory: Yeah, for sure. And I think to that point, right a lot of that evolves around who is that ideal person you want to connect with. Right. And just being able to understand what those people look like and how they bank and interact on a daily basis is crucial in that exercise.

Host2: Absolutely. And that's where the behavioral machine learning comes in, right?

Cory: For sure. And data, right. Just being able get the right data to those machine learning models that learn and activate on top of it.

Host2: Awesome. Wonderful. Well, this is some really great powerful information. And I think one of the last things I'd love to wrap with is, we're talking about future consumer behaviors. Talk to us just a little bit about the power of an artificial intelligence platform number one, and then number two, what our folks, our listeners should be looking for in a partner in a provider?

Cory: Yeah. I mean, I think, being in and around this space, right, AI, although it sounds like a very complicated term it's not, at this day and age, right. The models that we're using and we're applying towards our customers have been around for 10, 15 years. Right. And we're just figuring out more exciting and useful ways to apply them. Right. So, it kind of demystifying the hesitation around AI kind of the big term it entails. I think key for a lot of our clients, people we're talking to and scoping out relationships with. Right. And what that looks like to them. Really it's understanding what their goals are for that next period of time, whether it's the next year or next five years. Right. And then how can we curate a data set and better understand what they've seen from an historical sense to build models off of to then predict the future.

Whether that's in a broad sense of just going out and finding the right people to target or engage with, but we can get super specific down to what type of person in which zip code would be the most likely to open an account and apply direct deposit to it would be one example. Right. But really anything we have seen within the data we can predict accurately for it in the future.

Host2: That's wonderful. All right. Well, listeners thank you so much. We appreciate your time and you heard it. It's not elusive. It does not have to be complicated. You just need to find the right partner and Cory and I strongly feel that we are that partner. We'd love to hear from you. If you have any questions at all, you need any resource materials, holler at us. Cory, thank you so much for being with us. Have an awesome week.

Cory: Yeah, thanks, Kelly. Always a fun time.

Host1: Thank you for joining us and to connect with Kelly or Hillary to simplify your credit union marketing needs with EmpowerFi's full service marketing and design support team, please visit empowerfi.org. You can also email info@empowerfi.org for more information. This is the Speakeasy Financial Marketing podcast. Thanks for listening.