AI Changing way Banks view Middle Market Companies

Middle market companies could soon experience changes in how banks view and service them due to banks’ adoption of sophisticated artificial intelligence (AI) systems that rank companies in terms of their potential profitability as clients.

That’s one of the important takeaways from the 2018 Greenwich Excellence and Best Brand Awards in Middle Market Banking, which recognize banks that deliver outstanding quality to business clients.

At the top of the list of 2018 winners is Frost Bank, winning a total of 14 Greenwich Excellence and Best Brand Awards. Hancock Whitney won 13 and IBERIABANK, Pinnacle Financial and Synovus Financial, each won 12.

Leading banks are betting on technology as a key driver of their future business, in one form or another. “While business owners and corporate executives tend to think of bank technology in terms of client portals and mobile apps, IT advances are having as big an impact behind the scenes as they are in these customer-facing channels,” says Greenwich Associates MD, Chris McDonnell.

One of the most important technological changes is the increasing use of systems powered by AI and machine learning (ML) to analyze corporate businesses and identify those companies that would make the best—meaning most profitable—clients for banks.

(For example, multiple market leaders now utilize Greenwich Associates Explorer and Focus wallet models as a source to drive tactical growth analytics by prioritizing opportunity accounts at a company level.)

In middle market banking, the adoption of these platforms will, over time, diminish the relevance of traditional client segments of region, industry and even size.

“For some companies—including newer businesses and those with great growth potential—these changes will be for the better,” says Greenwich Associates VP, Dana Schwaeber. “Meanwhile, companies in more mature industries and markets might see considerably less of their old bank relationship managers, and find themselves ‘encouraged’ to do more of their banking through digital platforms.”

“All else being equal, banks able to effectively deliver better insights and advice to help business executives achieve their goals will win disproportionate share of wallet over time,” says Greenwich Associates MD, Don Raftery.

“Hyper-customized client insights driven by predictive analytics leveraging real-time data flows and AI / ML will help separate the winners in the future of commercial banking.”