A Perfect Storm is Brewing
Search engine product rot, TikTok/socialsearch & FI friction & failure to orchestrate create the perfect storm for agentic AI to make your bank invisible.
Photo by Jeremy Thomas on Unsplash
A perfect storm is brewing.
The storm? The evolution of agentic AI to search and evaluate financial services – across various institutions and perform tasks like account opening.
The equation:
the evolution of agentic AI > search engine product rot + TikTok + FI website friction + failure to orchestrate & collaborate
Search Engine Product Rot
If your FI relies on web searches for customers to find you, the news is bad. Search engines have declined in quality and the prospect is not good. Product rot is the reason why:
Tik Tok, YouTube & Reddit
Whether or not search engine product rot is driving the decline of traditional search engines, TikTok, YouTube and Reddit certainly are:
40% of Gen Z prefers TikTok over Google for discovering products, restaurants, and tutorials.
YouTube is the second-largest search engine, with more people consuming video content over traditional web articles.
Reddit discussions often rank higher than traditional websites in Google’s own search results, showing the power of community-driven content.
Source: Is Search Really Dying? What the Future of SEO Looks Like
Failure to Orchestrate and Collaborate
What is the financial institutions’ role in this perfect storm? In many issues of this newsletter and client engagements, I’ve advised FIs to pursue:
Open architecture. Upgrade, replace, modernize architecture to actually make your FI more open to creating new products/services, collaborating across LOBs.
Collaboration across LOBs to identify hidden tribes & new services.
Analyze and orchestrate customer & third party data & banking/payment processes. To deliver personalized, proactive advice, an FI must be able to incorporate customer & third party data in sensitive ways with banking and payment processes. The uses for this analysis and orchestration are many – including financial management services that customers, especially consumers, actually use.
Because the last 2 points have eluded many FIs, customers of all kinds – consumers, small business owners, even high net worth customers, the ability to find and evaluate products within a single FI or across FIs is fairly limited. Yes, there are some standalone sites but the criteria is set by the site and the customer must follow links to on the bank or fintech site for more information or to open an account.
But let’s not dwell on failures. In fact, dwelling on the past will There’s a coming storm that will be able to deal with all of this.
The Storm
Agentic AI is ready to do all of this but your FI’s website(s) must be ready.
With the rise of autonomous agents acting on behalf of users—whether individuals using AI assistants or businesses employing agents to manage finances—banks need to rethink their digital architecture. The solution? Dedicated, agentic AI-specific websites designed for intelligent systems to access, interpret, and act upon banking services efficiently. While you may not want to build this now, you may want to make your current website more AI-friendly.
We developed an accuracy-based framework to have agents crawl various bank websites and rate the website on a scale from 0 to 100 with 100 signifying the fact that the website contained enough information to evaluate various transaction, savings and money market accounts and then the agent could successfully complete the opening of a single account. Source: How to Build A Bank Website for AI Agents
It's not just financial services of course. AI Agents are poised to disrupt a lot of businesses who have relied on traditional search engines and even Tik Tok/YouTube, etc. for product searches.
All businesses, but particularly ecommerce and SaaS businesses, will have to radically adapt in order to remain competitive. One thing they’ll certainly need to do is ensure products are readily findable by AI agents—if they’re not, they’re likely to get passed over. If competitors have successfully made the jump first, they’re the ones who will ultimately snag the customer. Source Forbes Agentic AI May Replace Search Engines. Is Your Business Ready?
If an AI agent doesn’t find your FI’s products and services, it will mean your existing customers, prospective customers will never “find” you or your services. This situation will get more critical as consumers and businesses become “agent first.” Your mobile app won’t matter. Your customer experience won’t matter. You fintech partnerships won’t matter.
You won’t exist.
Strategically, AI agents mean more than just enabling your website for product search, evaluation and account opening. Others have talked about AI agents as the new customer. However, I see 2 addition implications for financial institutions :
Blur the boundaries between previously discrete activities of prospective and existing customers to look for a banking or payments product or service that meets their specific need at a specific time and place. The friction between searching for and opening an account will compress. And that compression is not necessarily in your control.
Corruption of your idea “customer experiences.” Your preconceived customer journeys and experiences available in your digital banking solutions won’t have the same weight when customers use AI agents. It’s probably time to expand - or explode - your conceptualization of customer experiences.
Takeaways
Financial Institutions
Expand your AI strategy to include more than use cases that increase productivity or improve customer experience. This is a good time to remember that AI is not a single technology or solution.
Consider relevancy of agentic AI capabilities in your innovation, product development, and marketing efforts.
Identify ways to blur product search, evaluation and transaction capabilities into your services.
Encourage collaboration between these teams and IT AI teams who have expertise in AI.
Don’t assume that only younger consumers will be want to use AI agents.
Use this use case to drive architecture and core modernization or replacement – whatever is necessary to enable your FI to support the ongoing blurring of boundaries among your tech and business siloes, customer segments and delivery end points – and whatever use cases that will be able to exploit this.
Digital Banking Vendors
It’s time to figure out how to accommodate AI agents in your digital banking solutions. Not just the agents themselves but
how does the availability of agents impact customer experiences and delivery?
how do you authenticate an agent opening an account?
how do you deliver account fufillment?
Identify whether your solution can actually support collaboration among FI LOBs, customer segments and delivery end points.
Who writes PivotAssets?
I’m an independent analyst, strategic advisor & consultant (& a former Gartner analyst). I’ve worked in and covered the banking industry for over 2 decades.
My aim is not to confirm what you know (and you are plenty smart!) but to challenge you & give you a fresh perspective & analysis on the transformation that is —and isn’t happening - in the industry.
How can I help you?
Want more insights and analysis on small innovations, ghosting customers, hidden tribes and leveraging your bank’s legacy? Need help positioning your digital banking solution or fintech to meet the demands of today’s banking environment? I have my own firm PivotAssets.
To collaborate with me: I can analyze your GTM strategy or sales or VC presentation, help you prepare for your first vendor briefing or your first funding pitch meeting. I also write piece of thought leadership relevant to your business, solutions or technology. I also organize and moderate webinars series, podcast or panel.
Contact me at stessa@pivotassets.co or via LinkedIn.
I’m also available for inquiry and strategy sessions via Third Eye Advisory.
Me, Elsewhere
Fintech Book Club - Our next discussion will feature our look at Rik Coeckelbergs' new book "A New Ethos in Banking" July 11 at 10:00 EDT. Join us on LinkedIn Live! In April we discussed Customer-Centric Innovation in Finance by Erin B Taylor and Anette Brolos.
I’m an expert advisor at Third Eye Advisory.
Theodora Lau, Barb Maclean, Efi Pylarinou and collaborated on this unorthodox, diverse perspectives about financial services & the year to come.
I spoke with Theodora Lau and Barb Maclean on their podcast One Vision about smart banking & hidden tribes.
I moderated a great panel of folks for a conversation on innovation. We cut through the hype and share practical advice for making your digital transformation efforts pay off. We definitely talked about the importance of small innovations.
Well done piece, Stessa! Great advice. Applies more broadly too.