Wildfire Systems has spent the last five years honing a white-label consumer rewards program used by major banks including Royal Bank of Canada. Now the startup hopes to help banks tap merchant-funded revenue streams by using rapidly evolving new AI tools.
The San Diego-based startup's newest service is RevenueEngine, which uses generative AI to link highly personalized offers within content that organizations may present to customers and earn a merchant fee when it leads to a purchase, Wildfire announced Tuesday.
The service is adaptable for any customer-facing organization's content, but Wildfire believes financial institutions are among the most likely to benefit from the ability to automatically embed merchant offers within existing customer communications.
"Generative AI is opening up new opportunities for organizations like banks, whose customers place high trust in them, to earn a share of revenue from helping merchants reach these buyers in the right context," said Jordan Glazier, Wildfire's CEO.
For example, a bank using RevenueEngine could embed personalized merchant offers in messages sent to customers receiving a mortgage, auto or student loan. Wildfire, which already earns a 4% to 6% fee from merchants participating in its nearly 60,000 rewards programs in more than 50 countries, would split a similar fee with the bank on completed sales, Glazier said.
Generative AI built into RevenueEngine can automatically link a personalized offer for items like furniture, appliances or other relevant home-office services for a participating bank's loan customer, and the bank could expect to earn around a 3% commission from sharing the merchant fee with Wildfire, according to Glazier.
Wildfire has not advanced beyond discussions with banks about using RevenueEngine, but Glazier said interest from financial institutions and card issuers is strong. Visa already uses Wildfire's loyalty marketing platform, and
"Banks are aware that downward pressure is building on many bank fees and potentially on payment card interchange, and they're interested in finding new revenue streams," Glazier said.
Online travel-assistance firm TravelArrow is the first organization that has signed on to use RevenueEngine for sending relevant merchant offers to travelers.
Wildfire isn't the first to devise a consumer offer engine for banks.
As generative AI-based marketing evolves, banks' rich transaction data will likely provide an edge in its potential to deeply personalize offers, said Richard Crone, a principal with Crone Consulting LLC.
"Customers trust their banks, so they're more likely to act on personalized product recommendations," he said.
But banks using such AI-powered marketing tools would need to find a balance between data monetization and maintaining consumer trust to avoid overloading customers with offers, which could backfire, Crone warned.
"Getting consent is vital to avoid a spam-like experience," he said.
Banks must also think strategically about managing data rights in the marketing context, according to Crone.
"The transaction data held by banks forms the bedrock of these offer engines. Therefore, banks should proactively negotiate their data rights. This could even extend to acquiring warrants or equity in startup service providers," Crone said.
Wildfire, which launched in 2017, has 60 employees. Glazier emphasized that RevenueEngine provides the AI infrastructure for monetizing offers, rather than generating content itself. A financial services company would use RevenueEngine to automatically link recommended products to the retailers selling those items online, through existing content including emails, websites, texts or scripts incorporated into chatbots.
