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BBVA Bancomer in Mexico and Bancolombia in Colombia partner with Juntos, a fintech startup, to deepen their customer engagement and product usage. Why wouldn’t the two banks just strengthen their customer engagement capabilities in-house?

A few weeks ago, we released a joint report with the Institute of International Finance (IIF), How Financial Institutions and Fintechs Are Partnering for Inclusion: Lessons from the Frontlines. As part of the report, CFI and IIF interviewed over 30 individuals from across the industry, including representatives from Juntos, BBVA Bancomer, and Bancolombia. Here’s what their story taught us about the value of successful customer engagement partnerships.

Engaged customers are better customers. Because large portions of the populations in the emerging markets in Mexico and Colombia are outside the formal financial sector, bringing them into it requires financial education and well-designed products and services. Simply providing products and services is often ineffective, as people also need to understand how they work and develop confidence using them. Several financial institutions we interviewed echoed the importance of frequent interactions with new low-income customers to build stronger relationships and increase loyalty, trust, satisfaction, and retention. They hope this kind of engagement will improve public perception and understanding of financial products and services, and ultimately increase the demand for such offerings.

This is where Juntos comes in. The Silicon Valley company provides an artificial intelligence-enabled automated SMS conversation service. Juntos sends tailored text messages to BBVA Bancomer and Bancolombia customers, reminding and nudging them to save and become active users of the banks’ services. Customers can respond through Juntos’ platform with more information on their financial needs and goals, and this information is used to personalize future communications.

Partnering allows the bank and the fintech to focus on their relative strengths in a complementary way. Financial institutions are specialized at providing banking products and services and acquiring new customers. A fintech like Juntos is specialized at building strong customer relationships and affinity with bank partners. In creating a realistic two-way dialogue via text message, Juntos enhances the customer experience without altering BBVA Bancomer or Bancolombia’s product and service offerings. The two partners complement each other’s work.

Partnering saves time and resources. The automated customer relationship Juntos provides is much less expensive than brick-and-mortar branches or banking agents. Moreover, automation creates a digital record of what helps increase customer engagement, which is used to inform increasingly tailored outreach. Our study notes that partnerships focused on customer engagement typically aim to increase usage and hence profitability for existing or recently acquired customers. The financial institutions we spoke with hoped for benefits from fintech partnerships in the short-term, whether through increased transaction rates or increased data on those transactions.

Continue reading for more specifics on these illustrative customer engagement partnerships between financial institutions and fintechs.

Bancolombia and Juntos

Bancolombia partnered with Juntos for the fintech startup’s first international pilot in 2013. The bank wished to increase usage among customers with largely inactive payroll or social benefit payment accounts. Bancolombia and Juntos targeted customers right after account opening. The pilot was a success, with an average satisfaction score of nine out of ten from participating customers. In addition, active new accounts increased by over 30 percent and account balances increased by 50 percent. Following this successful pilot, Bancolombia established a continuing partnership with Juntos. With Juntos’ help, the bank increased the use of agent and mobile channels among new customers, lowering costs for the bank and for customers.

BBVA Bancomer and Juntos

BBVA Bancomer’s partnership with Juntos began with a pilot to convert clients receiving payroll or government subsidy payments into engaged customers. Although the pilot took a year to plan, it ultimately showed sufficiently promising results for Juntos to become an ongoing technology provider for the bank. BBVA Bancomer pays the company for each customer Juntos communicates with. There is no integration into BBVA Bancomer’s core banking system except for a mechanism to share information between the institutions. All messages are sent from and received directly on Juntos’ platform. When customers text Juntos a response, Juntos shares this data with the bank, and does not own or keep it. The bank shares information on client performance with Juntos, though it is limited by client confidentiality regulations. As of the end of 2015, Juntos contacted 72,134 BBVA Bancomer customers, and 96 percent of them opted to receive Juntos messages.

For more on bank-fintech partnerships, including other standout examples, read the report: How Financial Institutions and Fintechs Are Partnering for Inclusion: Lessons from the Frontlines.

Have you read?

How Financial Institutions and Fintechs Are Partnering for Inclusion: Lessons from the Frontlines

New CFI and IIF Report Reveals Banks Are Leading on Financial Inclusion

The New Wave of Partnership Models Between Banks and Fintech Startups