Huntington building AI into digital advice tools

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Huntington Bank has tied together several digital budgeting tools it’s been quietly rolling out over the past six months into a dashboard it calls The Hub.

And it is bringing in artificial intelligence to the mix to alert consumers when their spending is clashing with their personal financial management goals, or when an erroneous transaction may have occurred.

The bank says this is part of the Fair Play Banking philosophy it launched in 2010, under which it has eliminated some fees and offers a 24-hour grace period on overdraft fees.

Huntington says the new digital features are also the result of feedback it got from a two-year “listening tour,” in which bank representatives visited customers in their homes and asked them about their banking and bill-paying challenges.

“We sat knee to knee with folks in their kitchens,” said Andy Harmening, senior executive vice president and director of consumer and business banking. “We watched them pull a calendar off [the refrigerator], take their calculator, go to their online banking and start to figure out what bills they could pay. The program is based on what we observed with customers and what they said they needed to make their daily financial lives a little easier.”

Regional banks tend to have the hardest time offering competitive mobile and online banking. They need to compete with big-pocketed large banks (including Bank of America’s Erica) and more nimble community banks, as well as AI-equipped challenger banks like MoneyLion and Qapital that tend to attract top digital product designers and developers.

Yet they are trying. PNC Financial Services Group has had its PFM tool, Virtual Wallet, for about a decade and KeyBank is integrating the HelloWallet that it bought from Morningstar in 2017 into its digital banking.

“What’s changed with a lot of these finance tools banks are offering now is financial insight is finally moving out of a tab and moving onto the home screen online and in mobile,” said Emmett Higdon, director of digital banking at Javelin Strategy & Research. “That’s a critical difference; that’s what’s going to lead to greater customer engagement.”

What Huntington has built

One feature of Huntington’s new Hub is called Spend Analysis. This tool analyzes a customer’s previous 12 months of transactions and reports their typical spending in basic categories.

“We’re getting testimonials from people saying, ‘I had no idea how much I was spending in this category,’ ” Harmening said. “They’re screaming for help. When you see your spend analysis and you see what you are spending, that tells you where you stand.”

Some customers have reported that they have changed their behavior because of being able to see their spending. An example would be seeing (or being shocked by) how much one has spent on dining out, and opting to eating in more to save money.

Many of the challenger mobile banking apps offer this kind of analysis, including Moven, Digit and Qapital, as do KeyBank and PNC.

A Spend Setter budgeting tool lets customers set up monthly spending limits by category and shows them how they are doing in a stoplight graphic — red for when the user is spending more than their budget allows, green when they are within budget.

This was launched late last year.

“We’ve already seen a spike during the holidays where people were setting budgets, saying, I’ve got to control the spending,” Harmening said.

Bank of America has a similar feature in Erica called Spend Path.

A Savings Goal Getter tool shows the customer how far along they are on savings goals they have set, for things like vacation, college savings, or a cash reserve.

“The overwhelming driver of this was when we did in-person customer conversations, they said, ‘We’re very stressed about money. Please be proactive — I need help,’ ” said Harmening.

A Look Ahead Calendar again loads data from the past 12 months of transactions and predicts when upcoming bills are likely to be due.

“If you have subscriptions to Amazon, Spotify, Netflix, things that are hard to keep track of quarterly, annually, or monthly, we will predict when the next one is coming out and, put it in your Look Ahead calendar,” Harmening said.

This could be most helpful with irregular payments that are harder to remember, like semiannual car insurance payments, Higdon said.

“So many folks don’t pay much attention to this stuff,” he said. “The percentage of people living paycheck to paycheck is disturbingly high. It would really help to get them out of that paycheck-to-paycheck zone if they could look further out.”

The newest feature is called Heads Up. It lets consumers set up notifications related to spending, saving and goals.

“It’s kind of like having a nagging mom,” Harmening said. “Maybe we don’t always appreciate what she says, but isn’t it nice to have somebody looking out for me? That’s what this technology forces somebody to do. You can choose not to set the text, you can choose to ignore a budget, you can choose to not see the spending analysis, but the folks that need and want that now have a tool that makes it easier.”

Huntington is bringing artificial intelligence software from Personetics to the Heads Up feature; this will be rolled out in February. It will tell customers when, for instance, their balances are too low to cover an upcoming payment, a bill is higher than normal, or a free trial is about to end and the customer is going to be charged.

“In the future, Heads Up will be more robust,” Harmening said. “For instance, if you have a double charge on your credit card, you don’t have to look at your credit card every day. If something comes in and all of a sudden you spent twice at this restaurant, we know you didn’t spend twice, they might have made an error and run it through twice, you can get a text alert that says do you know you spent $60 twice in a row at ABC restaurant?”

Looking for duplicate charges is a typical job for consumer-facing AI, Higdon noted. Citi’s mobile banking app, Wells Fargo’s Control Tower and Bank of America’s Erica all alert consumers to this kind of unusual behavior, as do AI virtual assistants like those from Clinc, Kasisto, and Personetics.

In a Hub tool released last week, the bank brings these four components together in a dashboard.

“One piece builds on the other, and we’re making it easy for people to use,” Harmening said.

Huntington is doing the work of budgeting and tracking for the consumer, Harmening noted.

“We have an overall philosophy of looking out for people,” he said. “We think we’ve done a good job of marrying together a technology view of service combined with a product set we think other people don’t have, and if all else fails on the product and technology delivery of that product, we have top-in-industry customer service in the branches. It can compete with digital and tech players, but we think it’s a way more comprehensive experience depending on what someone needs and wants.”

Work to be done

This is a fair point, in Higdon’s view.

“For too long we’ve assumed consumers know how to use these tools, that consumers understand personal finance,” he said. “We’ve been giving consumers too much credit, and we’ve been putting far too much burden on them.” He also said banks need to do a better job of linking alerts to calls to action.

Huntington is not yet importing data from accounts customers might have at other banks, card companies or brokerages, to give them a complete view of their finances.

“We have that conversation on a regular basis,” Harmening said. “We want to make sure we’re getting all the right attributes in the categories we have for our own bank first, but that’s something we’ll consider in the future.”

Harmening said 40% of Huntington customers have investigated these tools, and “thousands” have begun using them.

“It’s more to come, in our opinion, on what that means — how deeply do they use it, what repeat usage, [and] does a person who uses Spend Setter go on always to Savings Goal Getter,” he said.

All these tools should help Huntington and the other banks that have something similar with engagement, Higdon said.

“Mobile banking logins are off the charts, but the average spending time in mobile is one minute total,” he said. “That’s not really engagement. How do you take advantage of the fact that you’ve got customers coming in to use an app 15 times a week, get them to stay longer and drill down more. Through these kinds of tools is one way.”

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