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Data Overload? The Impact of AI on the Customer Experience

 

Banks and financial institutions have long been at the forefront of adopting technologies to increase efficiencies and provide better service to customers. From ATMs to online banking, they’ve helped to seamlessly integrate transactional technologies into the customer’s daily life. Financial institutions currently find themselves at the forefront of adopting new cognitive AI technologies that are redefining and elevating the customer experience. To add to our webinar, we speak to Grant Thornton about the realities of what fintech really means, and how you can capitalize on the impressive challenges we should expect over the next decade.

 

Finovate: How can your organisation prepare for and embrace the rise of intelligent automation? What are the key steps to consider?

Grant Thornton: Intelligent automation, including robotics and artificial intelligence, have transformed entire industries over the last two decades. Now it’s time for the financial services industry. Although it’s still early, financial services is headed down the same inevitable path to disruption and towards an explosion in productivity and efficiency.

In the next 5-10 years, the productivity of the enterprise will be transformed through multiple technologies, such as Robotic Process Automation (RPA), Natural Language Processing (NLP), or Artificial Intelligence (AI).

Fintech represents a long-term, systemic change in the industry. The only successful way forward is to take a long-term view. The key is to plan for a steady pace of adoption for interrelated technologies rather than focus on individual projects and siloed technological innovations that will not build upon each other.

The first step is to improve your “digital quotient” — the extent to which your processes, information, data and activities are in digital form. A high digital quotient makes your path to the cognitive enterprise easier.

To build your digital quotient, take a clear look at your efficiencies and operating model:

  • How many processes and activities are digitally accessible?
  • How much data is available?
  • How much conversion work is needed?

Start by piloting small, focused projects that are clearly measurable and materially understood. Engage your C-Suite and ensure that they understand the importance of building your organization’s digital quotient. They need to support the significant operational and cultural changes that come with becoming an automated cognitive enterprise. This is critical to your organization’s success.

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Finovate: Do customers expect AI-driven experiences in their interactions with businesses?

Grant  Thornton: Thanks to their experience with leading retailers and technology giants—including Apple’s Siri and Google’s Alexa—we believe customers will not only expect, but will actually demand AI-driven experiences in their interactions.

In fact, AI will soon seem normal:

  • By 2020, IBM[1] projects that more than 85% of all customer interactions will be handled without the need for a human agent.
  • By 2025, Forbes Magazine[2] estimates that 95% of customer interactions will be supported by AI technology.

AI empowers personalization like never before. Customers don’t want to be treated as “one of the crowd.” Companies such as Amazon, Walmart and Google set high standards for quality of personalized customer experience, and customers routinely compare their experiences with financial institutions to their most recent shopping experience.

Finovate: What are the key advantages of offering chatbot interaction? Do customers consider communication with chatbots as a 2-way communication channel? In the future, will banks have something like an Alexa to guide their customers through their website and services?

Grant Thornton: According to a report by Grand View Research reported on BusinessInsider.com[3], the global chatbot market is expected to reach $1.23 billion by 2025, an annual growth rate of 24.3 percent. Likewise InfoWorld.com[4] reports that approximately 45 percent of global users prefer chatbots as the primary mode of communication for customer service inquires.

In fact, according to Forbes Magazine[5], chatbots are becoming so common that consumers are growing to expect them. For example:

  • Domino’s uses a Facebook Messenger chatbot named Dom that allows customers to place an order simply by sending a message that says “pizza”. The bot gets the details and the order is completed faster than a customer could call the store or drive to place an order.
  • China Merchant Bank, one of the largest credit card companies in China, takes advantage of AI bots to interact with a huge number of customers. The bank’s WeChat Messenger bot handles 1.5 to 2 million customer conversations each day, mostly about things like card balances and payments. Customers can quickly get the information they need, and it saves the bank from hiring thousands of human employees to match the same volume of requests.

In banking, chatbots can go beyond the basic functions of mobile banking, enabling banks to start a conversation about each customer’s finances. They can use predictive analytics, and cognitive messaging to perform tasks ranging from making payments to checking balances and paying down debt and even notifying customers of personalized savings opportunities.

Millennials, in particular, seem to be enthusiastic about computer-generated advice and services. This trend reflects the fact that they typically gravitate toward the latest in digital banking technologies as digital natives. This is not just because these tools are cool or cutting-edge, but because they deliver banking customer experiences that are simple, consistent and relevant.

Finovate: Can you share what intelligent opportunities are available for the customer within personalised eCommerce experience?

Grant Thornton: It’s one thing to know what the consumer wants and what should be done to provide a differentiated and contextual consumer experience—it’s another to be able to deliver on the “personalization promise.”

Staying relevant in today’s competitive environment demands personalization. Unlike most banks, Fintech firms provide consumers with an improved digital experience based on contextual insight and simplified delivery of financial services. These smaller start-ups build solutions that often are superior to those from legacy financial institutions by leveraging advanced analytics of consumer data and digital technology.

Whether they’re patronizing traditional legacy banking institutions or the newest of Fintech startups, consumers demand deals and discounts, convenience, relevance and customer experiences that combine the latest in digital banking with human interaction. They will share personal data to get what they want, and will switch if they do not.

Finovate: How to achieve balance between the human touch and technology in customer experience? Does AI contribute to the true currency of a customer relationship – engagement and loyalty?

Grant Thornton: Because consumers do the vast majority of their shopping for a new financial institution using digital channels, it is no longer adequate to wait until the customer or member walks into a branch or decides to purchase a new product online or via smartphone.

Instead, banks need to engage customers at the earliest stages of their purchase journey.

AI is an important tool for institutions that seek to become a bank with a “personal touch.” They should not, however, presume that frequent customer interactions alone create true engagement or develop enduring relationships. What really matters is the quality and personal relevance of customer communications.

Banks must put customers’ wants and needs at the heart of all activities. They need to shift their focus from simply selling products and services towards providing relevant and contextual financial advice. In other words, a bank should demonstrate a true interest in customers’ financial well-being. AI affords banks the insight and capability they need to make this shift in focus.

Finovate: How can an organisation capitalise on the deployment of a smart AI/ML solution?

Grant Thornton: At the most basic level, technological advances can boost process efficiency, which translates to faster, around-the-clock responses to customer inquiries. Additionally, chabots powered AI/ML can assist customers through the online account opening process by proactively suggesting personalized services based on life events and previous banking experiences.

Beyond traditional uses for financial performance and regulatory reporting, data can be collected, processed and analyzed as a means to understanding customers’ expectations in order to enhance their experience. As banks advance their digital programs, they can uncover insights about trends, products and services to improve, which to discontinue, and where to devote resources. This results in institutional cost savings, but more importantly, in greater customer satisfaction.

At a higher level, AI/ML solutions can reveal new opportunities by tapping into underutilized data sources. For example, monitoring internet browsing and uniting customer, product and pricing data can reveal new insights into customer desires and preferences. With this knowledge, a bank can nuance solutions and target ads to specific consumer groups and influencers.

Finally, smart AI/ML solutions can help banks access data that supports or enhances their overall strategic framework. In the process, they can develop a holistic understanding of their customers, opening the door to faster, more flexible product prototypes that are responsive based on the data and interaction that the customers are providing.

This holistic picture of the customer needs enables financial institutions to be proactive and to cross-sell more effectively. In essence, they are able to more effectively anticipate and serve customer needs, helping them on their journey while increasing share of wallet.


[1] https://www.ibm.com/blogs/watson/2017/10/10-reasons-ai-powered-automated-customer-service-future:/

[2] https://www.forbes.com/sites/blakemorgan/2018/02/08/10-customer-experience-implementations-of-artificial-intelligence/#390124ad2721

[3] http://markets.businessinsider.com/news/stocks/Chatbot-Market-Size-to-Reach-1-25-Billion-by-2025-CAGR-24-3-Grand-View-Research-Inc-1002381903

[4] https://www.infoworld.com/article/3245847/artificial-intelligence/6-reasons-why-chatbots-are-taking-over-customer-service.html

[5] https://www.forbes.com/sites/blakemorgan/2018/02/08/10-customer-experience-implementations-of-artificial-intelligence/#390124ad2721