This document discusses how banks can use anticipatory banking and AI to create advantages in a digital world. It outlines how historic differentiators for banks like operational efficiency are eroding, shifting the competitive basis to personalized customer experiences. Anticipatory banking uses AI to understand individual customers and anticipate their needs to maximize their financial health. This improves customer acquisition, retention, cross-selling, and reduces delinquencies. The document provides examples of how anticipatory banking could work through use cases and outlines key enablers like data, AI platforms, and journey mapping. It emphasizes the importance of governance throughout the AI lifecycle to ensure fairness and transparency.

1. Anticipatory Banking:
Using AI to Create Advantage in
a Digital World
12 June 2019
RASHED HAQ
Global Head of AI, Robotics & Data

2. Transformation of Retail Banking
2
Historic differentiators for
attracting and retaining
customers is eroding
AI is enabling new ways to
create offerings
Customer Loyalty
Open Banking and the
emergence of banking platforms,
FinTechs and distributed ledgers
is reducing switching costs and
exclusivity of relationships
Open Ecosystems
The transformation of the back
office will remove operational
efficiency and scale as a
competitive differentiator
Competitive basis is shifting
to the front office
Operations
Transformation

3. 3
Anticipatory Banking
is
a customer-centric platform
to create intelligent fortification of the core business
that provides value to both the customer and the bank

4. 4
Value (WHY)

5. Customer Centric Model
5
Confidence in BankLO HI
%ofCustomersAgreeBankisDoingThisLOHI
Looks after my
financial well being
Helps me manage
my finances
Communicates openly and
about meaningful topics
Lets me bank
anytime, anywhere
Source: Gallup
Branch, mobile &
online satisfaction Shift from being in the
financial services business
to being in the
financial health business
6X
customers say their
bank is the only
financial institution they
need

6. Anticipate customer needs and personalize services at scale to each
individual through their specific journey to maximize their financial health
6
Understand Customer
Things about them
How they will behave
What their needs are
Maximize Financial Health
Financial health score
Percent of customers
who levelled up
Optimize Spending
Make payments on time
Spend less than earnings
Manage Loans
Have strong credit score
Ensure debt is sustainable
Grow Savings
Have short term rainy-day fund
Grow long term savings

7. Business Value for the Bank
7
Bank Outcome Size Benchmark Rate Δ (N) Value / Y
Customer Acquisition: Increase account openings by N% due to brand and
service differentiation, growing brand value and NPS score
10 MM
(total customers)
$300 2% $60 MM
Customer Attrition: Boost customer satisfaction and retention and
decrease customers attrition by 5%
1.5 MM
(15% of 10 MM)
$500
($200 acquisition
cost)
5% $38 MM
Products and Services: Increase cross-sales and customer lifetime value
with an increase in products per customer by N% (e.g. from 1.3 products
/customer to 1.5)
10 MM $100 5% $50 MM
Deposits: Larger bank deposit balance per customer by N%
10 MM $50 7% $35 MM
Delinquencies: Reduce delinquencies on loans and credit cards and
subsequent charge-offs by N% 100 K $350 20% $7 MM
Efficiency: Improved employee productivity, and drive employee
engagement and retention
10 K $75 K 8% $60 MM
$250 MMAnnual Financial Benefit
Impact of
Anticipatory
Banking

8. 8
Use Cases (WHAT)

9. 9
Anticipatory Banking Framework
Engage
Customer
Understand
Customer
Data &
Signals
Decide
Product
or Service
Bank Transactions
User Activity
(1st party)
External Information
(3rd Party)
Machine Learning
Deep Learning
Natural Language
Processing
Machine Learning
Deep Learning
Semantic Reasoning
Journey Orchestration
Digital Content
Direct Messaging

10. Use Case 1: Need for Increased Credit
• Customer injures ankle and needs additional
money to cover medical expenses
• She reads about injury on WebMD
• While reading an article on EPSN’s website, she
sees a bank ad offering new/increased credit limit
• Sustained low liquidity levels
within the checking account
• Customer makes several doctors
visits and co-pays with credit
card indicating an increase in
health related spending
• Increased activity on health
related web articles (WebMD,
etc.)
• Ad impressions from sports
websites
• Pays debts timely
• This is a bank user who is likely
dealing with an unexpected
health event
• Does not have liquidity to
manage an unexpected event
• Has low credit risk to date
• Offer new credit line
• Offer advice for making sound
credit related decisions
• Show digital ad through ESPN
INCREMENTAL INSIGHTS
• May need advice managing
credit
• Enjoys reading about sports
INCREMENTAL INSIGHTS
• Needs a savings plan
Engage
Customer
Understand
Customer
Data &
Signals
Decide
Product
or Service

11. Use Case 2: Need for Savings
• Customer earns a promotion to Senior Architect
and a significant pay increase
• Customer signs into online account to pay bills
• A masthead notification reminds her of prior unexpected
spending spike and suggests it’s a good time for an
emergency savings account.
• Increase in the frequency of a
higher direct deposit amount
• Sustained low liquidity levels
within the checking account
• Lack of secondary account
with funding
• Previous record of an injury
and unexpected financial event
• This is a bank user who had an
increase in her monthly income
• Does not have enough liquidity
to manage an unexpected event
• Offer advice to build an emergency
fund through a savings account
• Show masthead with
recommendation
INCREMENTAL INSIGHTS
• Customer is focused on career
• She is working in a company
that offers a path for career
improvement
INCREMENTAL INSIGHTS
• She is smart about savings
• She is interested in planning
for the future
Engage
Customer
Understand
Customer
Data &
Signals
Decide
Product
or Service

12. Use Case 3: Need for a Mortgage Loan
• Customer starts thinking
about purchasing a condo
• She begins looking at home buying sites
• She receives a personalized email from her bank that
includes tips on buying homes in his area, mortgage
calculator for how much she can afford, and how to
apply for pre-approval
• Increase in savings, and lower
spending, for a longer than
normal period
• Increase in frequency of logging
into bank’s online account
• Web activity showing increased
interest in real estate related
browsing, including searching for
Mortgages and comparing
• Increased visits across various
city neighborhoods, via location
graph from his device info
• This is a bank user who is actively
looking to purchase a home
• She is researching the financial
instrument available that can
facilitate a purchase
• Suppress credit related marketing
• Offer advice on buying a new home
and provide a link to a local branch and
the name of the Branch Manager
• Send email with
recommendations
INCREMENTAL INSIGHTS
• Comparison shopper
INCREMENTAL INSIGHTS
• Accessible during weekdays
Engage
Customer
Understand
Customer
Data &
Signals
Decide
Product
or Service

13. 13
Enablers (HOW)

14. Key Enablers
14
Data
Aggregate sufficient data depth
and bread to get meaningful
behavioral signals
Include sufficient 3rd party data
AI Platform
Build the AI platforms and
processes to experiment and
deploy AI models at scale
Govern AI model risk for
fairness, transparency and
other policies at every step
Journey
Map out customer journeys and
knowing where the insights will
be used and in what way
Integrate systems and
processes, with pre-approved
messaging, so activations can
be real time

15. Data and Journeys
15
CRM
Web Mobile Email Social Digital Ad Contact
Consumer
Devices
Call Center
Content
Management
Ad
Impressions
Journey Orchestration
Journey
Data Hub
IntelligenceJourney Reports

16. Models
Predict
Life Event
Novel
Item
Desire
Genome
User
Intent
Search Social Ad Imp
Transactio
n
Brows
e
Offer
Account
Activity
Call
Center
Recommen
d
Product in
App
Direct Send
Recommended
Product
Direct Send
Offer
Improve
Operations
Predict Best
CoSelling
Products
(Xsell)
Propensit
y to Buy
Future
Purchase
s
Customer
Lifetime
Value
Best
Recommen-
dation
by Channel
Demand
Forecast
Best Offer
Type by
Channel
Best
Channel
Best Offer
Type
Ideal
Price
Point
Best
Alternate
Product
(Upsell)
Call
Volume
Forecast
Call Intent
Customer
Churn
Topic
Modeling
Discover
Churn
Reason
Item
Impulse
Desire

17. AI Platform
17
Impact of
AI Platform
Approach
Regulatory &
Compliance
Pressures
Typical Bank Leading International Bank Digitally native company
No.ofmodelspermonthperperson
No. of data scientists
Feature
Marketplace
Data collection and
readiness for
modeling
Model
Builder
Model creation,
refinement and
validation
Inference
Activator
Risk governance,
model deployment
and production
activation
Performance
Manager
Production
monitoring and
potential retraining

18. Build Model Risk Governance into Each Phase of the Project Lifecycle
18
Data Quality
Data Bias Detection
Protected Features
Model Reproducibility Fairness Testing
Model Interpretability Retraining Triggers
Model Regularization
for Bias
Boundary Conditions &
Sensitivity Testing
Failsafe Circuit BreakerFair Data Preprocessing
Equalized Odds
Postprocessing
BEFORE MODELING DURING MODELING AFTER MODELING

19. RASHED HAQ
Global Head of AI, Robotics & Data
Rashed.Haq@publicissapient.com
BOOTH # AI520
Thank You“We are on the brink of the algorithmic
enterprise. Today’s generation of
business and technology leaders can
have a metamorphic influence on
humanity by catalyzing applied AI for
every enterprise.”