AI in banking: how is it being used to resolve customer painpoints?


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27th September 2021

New technologies have afforded us new possibilities for customer service. When digital consumers visit a website and require assistance, the majority are now used to being paired with an automated chatbot in the first instance. It happens to them across multiple brands and indeed multiple sectors. Either the customer finds what they were after using the chatbot, or they are connected to a human customer service agent.
We have become accustomed to immediacy and convenience, so being able to find answers without holding on a telephone line is desirable for many consumers. But are chatbots the solution that they are looking for? And in what way is AI in banking being used to resolve customer painpoints?
At the CX FS Summit earlier this month, we hosted a panel of experts from the likes of Microsoft, Mettle and Vybecard, who discussed this very question.
How are AI and chatbots being used?
“Let me start to call out the obvious: due to the pandemic, the new normal is much more digital in general.” Those aren’t our words – they’re those of Christian Thier, who is Head of Financial Services for Microsoft in Switzerland.
“[It’s] data driven, and digital transformation is accelerating everywhere from front to back. The challenger banks are here to aggressively take market share, giving traditional banks a hard time. Customer experiences have shifted clearly to a more digital and frictionless experience, and this will remain and only accelerate. The AI themes we are seeing in banking [exist] everywhere from front to back but in particular around automation needs, digital engagement and customer experience.”
The explosion of challenger banks, fintechs and other digital innovators that we’ve seen in the last 5 years is causing incumbent institutions – sometimes with a gentle nudge, other times with a huge shove – to build on their own customer service offerings. Digital challengers usually lack the physical infrastructure that legacy banks enjoy, so they have made the most of creative solutions like chatbots and automated assistants.
As a result, customers are used to a bit of self-service when they need support. The point is to make it easier – both from an operational perspective but also from the customer’s perspective – says Andy Mason, Head of Operations and FinCrime for Mettle.
“We should be able to answer at least 80% of customer questions almost immediately generally using bots – that’s what we’ve started to embrace in Mettle,” Mason says. “It’s not only to do it from an efficient perspective, it’s also to ensure that we understand the type of questions that people are asking – that automated feedback loop in terms of learning the things that people are asking about and therefore perhaps where the product needs improving, so we build that feedback loop so that information and that data is actually being automatically captured and driving the product backlog for our engineers to then go and fix things on.
“It also means longer term we can connect it into things like knowledge hubs, which allow us to actually utilise that information that the customers are talking about, that our teams are having to answer questions on, so as well as delivering product improvement there’s also a huge opportunity to understand what the themes are but also longer term to build communities that can self-serve with each other using that data.”
Guillaume Dretz, Head of User Experience for Vybecard, says that self-service is increasingly what modern consumers are looking for.
“I’m working with Gen-Z and in 10 years, these customers we can say will be the customer of all of our banking services. They don’t like to wait and they don’t like to ask for anything. We have to understand that they live in the Spotify, Netflix, Amazon Prime world and in this world, you click and you get it immediately. It’s hard for them to understand that a simple wire transfer can take 1–5 days.
“That’s why market players need to invest in self-service banking because the new generation is already living in the self-service world. Our challenge is to work towards offering this service while maintaining a high level of security.”
Are chatbots the best way to do CS?
Dretz tells MoneyNext: “I’m not sure if chatbots and AI are the best way but this technology can help companies to offer better customer experience for sure. I don’t think chatbots or this technology will replace humans; it can be really helpful in a few situations to advise customers why the human can not avail in the interaction…
“When the customer needs expertise on a specific case or issue, the human can be available to create an emotional link between the customer and the brand. That’s the point. From my point of view, in a very competitive market, companies that create an emotional connection with the customer will win.”
He explains that chatbots are really helpful at qualifying an issue before it reaches a human. That way, it can help the customer service agent to provide a fast and accurate answer to the problem once they’re connected with the consumer. It should be used to bring customer service to the next level, Dretz says, not as a means to cut cost.
And Mettle’s Andy Mason explains that there are very specific circumstances where AI and chatbots can prove helpful.
“If it’s something pretty simple, then a bot is perfectly placed to do that – and actually, if you build it in the right way, you can use the conversation with the customer to automatically do what they’re asking via the bot without human intervention.
“Where there’s a more complicated query that requires that emotional engagement, then absolutely [human interaction is] critical to making sure you don’t harm your customer experience by using bots in the wrong situation. It shouldn’t replace human beings but we should make sure where the value is being added either through a bot or through a human, then that’s an explicit decision we make with those models.”
Is self-service banking the future?
The Covid-19 pandemic has accelerated digital adoption and it’s likely that we will see more change and more innovation in the years ahead. The mix between human interaction and AI in banking will be different for each provider, but our digital expectations will have a significant impact on the way consumers receive their banking services.
Microsoft’s Christian Thier says: “I see a trend to a much more purpose-driven banking that expands from traditional banking products into other areas of life. These ecosystems will emerge and span across different industries, leveraging open banking and other standards to drive value for the end-consumers through frictionless, proactive and hyperpersonalised experiences. The traditional values of banking such as trust, security and discretion need to be reimagined in such an ecosystem-driven world.”
He cites the example set by Flowe, a digital challenger bank from Italy. It analyses consumer spending and for each transaction, compares the estimated CO2 footprint that is produced in the value chain – an increasingly popular feature among fintechs, with consumers more eco-conscious than ever. Flowe allows consumers to offset this by planting trees in Guatemala, for instance, or by making different choices the next time they spend.