Retail Banking

Retail Banking

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Artificial intelligence: improving customer experience through information insight

With the enormous growth in computer power, memory, cloud systems, global connectivity and customers’ technology fluency, Artificial intelligence (AI) is becoming ever-present. Incorporating AI in operation could herald an important shift in the organisations function and individuals work, and therefore the extent to which banks adopt AI is a key strategic decision. AI technology learns from its interactions with the environment; it is self-learning and in that way differs from the use of technology to simply automate processes.

Some of our favourite companies have already adopted AI and are effectively using it to tailor their customer offerings and increase efficiency. Spotify, for example, uses machine learning to propose new playlists to their users based on the previous artists and type of music they listened to. The benefits are immediately visible, an activity which, historically, would only be offered as a bespoke and resource heavy (time and cost) service can be quickly and easily carried out, and replicated.

Without AI, one can only imagine the time and effort Spotify would need to expend to provide tailored playlists and music suggestions to customers; they would need to hire an army of people to analyse users’ listening patterns! To a degree, Spotify’s success can be attributed to this personalised experience, so why couldn’t it be the same with your bank?

What are banks doing to leverage AI?

Banks are starting to invest in AI to improve customer relationships, partly due to disruptive digital change from more agile first movers, increasing demands of ever-tech-fluent customers, multi-channel banking and increasing pressure to improve efficiency.

The most recent events around transformation are enabled by information insight, giving consumers the products and services that agree with their needs when and where they require them. To provide these products and services banks need to have the ability to collate and analyse vast amounts of data and utilise these insights to facilitate decisions and make changes in real time.

Furthermore, it requires the ability to merge several technological and strategic solutions together. The successful banks of tomorrow will be those that utilise information insight to create an experience for their customers that is bespoke to them. Banks are beginning to harness data insight from the perspective of their customers, as opposed to the traditional divisional and product silos way of gathering information.

Santander and HSBC, for example, are the first UK banks to launch voice-banking technology: the first phase has enabled customers to ask about their card spending through calling their app; the second phase includes advanced features such as the ability to make payments, report lost cards, set up account alerts and answer a broad range of questions. AI is being used by leading banks to accelerate customer-centric experience design and also fulfil digital transformation through insight data generation and customer engagement.

In March 2016, The Royal Bank of Scotland launched their new system ‘Luvo’, an AI system that will help call-centre staff answer customers’ questions more quickly and efficiently.
Luvo talks to customers directly to answer straightforward questions, freeing up time for staff to answer complex issues. It is an easy web chat application that caters to customers common questions without them having to call in.

Smaller banks, such as Clydesdale and Yorkshire, are also using AI to help customers manage their spending and saving through their ‘B’ app. The app, which was designed following customer feedback is a strategy to draw more “tech savvy” young individuals to the bank, allowing them to move cash between current and savings accounts;, offering multiple saving pots, tagging and tracking of spending and tailored messages, hints and tips to benefit the customer.

AI technology will enable their customers to open accounts in about 10 minutes and reflects a significant shift in customer behaviour, especially among ‘millennials’ seeking digital banking on-the-go. All of these new initiatives clearly benefit the customer in terms of user experience and speed of requests.

Are banks creating a perfect world?

Adoption of AI is not without challenges; in particular, banks will need to address concerns related to the monitoring and analysis of customer data. AI can enhance the user’s experience, but it can also lead to instances in which users find this ‘analysis’ intrusive. Companies can address these concerns by clearly articulating the benefits of adoption, building trust in the technology e.g. AI provides relevant and timely answers, is available on demand through multiple channels and improves the general customer experience.

AI is proving to be a game changer for the banking industry and first movers are taking advantage of its ability to provide customers with tailored products and services on demand with fewer touch points and lower costs. Although challenges exist, AI has the ability to allow banks to develop new highly personalised customer propositions and improve customers’ experiences– even providing more effective, efficient and relevant advice than they could receive from humans!

 

About the author

Carole Boissat
Carole Boissat
Carole is an Associate Consultant in the Business Model Transformation Practice, with a focus on Strategy & Operating Model. Her knowledge and delivery expertise lie within the Financial Services industry.

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