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With another economic slowdown looming on the horizon, banks and other financial service providers must steel themselves to weather the potential storm. And in today’s digital-first world—where disruptors from fintechs to mobile banking startups threaten market share—customer experience matters more than ever. To remain competitive—or even viable—banks must find innovative ways to deepen customer relationships and offer more engaging CX—all while lowering the rising cost of customer interactions.
Kim West, Director of Product Marketing for Uniphore, recently spoke with Daniel Faggella, CEO and Head of Research for Emerj Artificial Intelligence Research, on the growing need for—and impact of—conversational AI and automation in the banking industry. If you missed the live discussion, don’t worry—we have you covered. Here’s a recap of her appearance on the Emerj webinar:
Conversational AI in Banking – Practical Uses Cases for Achieving ROI
What is the state of banking today?
“Big banks” today are facing some serious competition—and not from traditional players. According to West, the rise in mobile banking—which has steadily gained acceptance and even preference in the wake of the global pandemic—has allowed smaller, digital financial service providers to make significant inroads into a market that was, until now, largely off limits. “The adoption of digital banking technology has accelerated quite a bit,” she explains. “Now you have brick-and-mortar, traditional-type banking firms really trying to think through how to keep up with the pace of what’s happening with nimbler financial tech or fintech companies.”
What does today’s banking customer look like?
Here’s a hint: they don’t stroll in during normal business hours. Today’s banking customers are, above all, digitally proficient. They’re accustomed to shopping and conducting other business online, at their convenience, and they expect their bank to offer a similar experience. “Customers now are looking for more than just a bank to offer typical things,” West continues. “The idea of [having] to do anything on the bank’s time is just no longer part of the scope of how [customers] choose to bank—and it’s much easier for them to switch.”
With so many new digital options at their disposal, banking customers are “experimenting” more than ever before. Instead of consolidating their holdings under one bank, today’s customers are increasingly spreading them across multiple accounts. (You can read more on this trend in our discussion on digital disruption with fintech guru, Brett King.) This trend flies in the face of traditional banking, which largely relies on customer history and loyalty to build growth—and keep it in-house. “If you think of all the financial products that exist, it’s so much better to have a customer that has multiple products with you instead of just ‘tasting one flavor’ of what you’re offering,” West advises. In place of eroding loyalty, she sees digital convenience as the new primary motivator for continued customer engagement.
What are the top challenges banks face today?
Digital customer “democratization” is only part of the reason traditional banks are losing market share. West identifies four key challenges that all banks—not just the big names—face today:
Risk & Compliance
With the rise in digital banking, financial institutions are under greater pressure than ever to comply with a growing and evolving set of digital privacy and security regulations—and that compliance is uniformly communicated and executed across multiple channels. “A really big pain in the banking industry is ensuring that if you have customers that are connecting with you, whether it’s in person or digital, that there is a consistency in how your employees are handling compliance,” West explains.
Sales
Today, having a competitive portfolio of financial products under one roof is no longer enough. Digital customers expect solutions to be easy to access and use remotely—or they’ll look elsewhere. This is especially true when it comes to managing multiple accounts. To remain competitive, banks must ensure customers have a seamless, consistent experience across their entire portfolio—from their home loan to their checking accounts to their traditional or cryptocurrency investments.
Loyalty
“We all know that the cost of acquisition—trying to acquire a customer—is quite high,” West acknowledges. “It’s much easier to sell into an existing customer.” However, different customers engage with banks in different ways and, often, through different channels. To build loyalty across different banking personas—and often across different generations—banks need to reach customers on the channels they prefer. For younger banking customers, this increasingly means delivering a fast, frictionless digital experience that they can engage with from anywhere and at any time.
Cost
The three challenges above have one thing in common: each are contributing to the rising cost of banking. Battling fraud, maintaining compliance, selling to and retaining customers all incur significant costs. Here, West suggests banks consider how technology help can lessen the financial burden of backend operations. “What are the things that you can do operationally to be more nimble, to be more efficiently? How do I make sure I’m providing the best experience but not to the detriment of my bottom line?” The answer is with artificial intelligence and automation.
How are AI and automation helping banks overcome these challenges?
Compliance, sales and customer loyalty, in themselves, aren’t significant cost drivers; it’s the amount of manual effort behind them that pushes budgets into the red. However, by augmenting—and, in some cases, supplementing—human effort with AI-powered automated effort, banks can dramatically cut CX operational costs and drive hyper-efficiency. To illustrate just how, West gives three use cases from real-world companies that saw significant ROI from their conversational AI and automation initiatives.
Use Case 1: Compliance Automation
How can AI and automation cut compliance cost and effort? West explains how a large Asian consumer finance company struggled to manually monitor less than 4% of their 1.2 million inbound contact center calls. By “training” conversational AI to zero in on compliance-related interactions and automating the broader call auditing process, the company was able to accurately monitor 100% of calls—saving roughly $636,000 annually and untold hours of manual effort. “This is the value of technology [when] we think about automation,” West explains. “You’re no longer just waiting on humans and the capacity that they have to only monitor a certain percentage of calls.”
Use Case 2: Improving Customer Experience
On the customer experience side, West shares how a U.S. national mortgage association used conversational AI to gain richer insights into how its customers felt about the company’s customer experience. It was then able to identify which pain points most frequently frustrated customers and customer service agents alike. “What are the triggers for why customers are calling in? What is leading them to being upset or escalating on certain parameters? And what can we do now to improve not only the contact center experience but how we as a business service these customers”? she asks. Armed with this data, the company was able to fix critical gaps in its CX, reduce the number of low-value calls bogging down its contact center and drive higher CSAT and NPS scores—two key indicators of customer loyalty.
Use Case 3: Increasing Sales Efficiency
Selling financial products face to face is challenging enough. Trying to sell them remotely is exponentially harder. “In this digital environment, you are now dealing with [customers] on the phone versus in person,” West explains. “To be able to sell the right products to these customers takes more than one interaction, and it takes the diligence of ensuring that you’re providing them with accurate information.” To ensure its sales team could do both, one international investment bank turned to conversational AI and automation. By analyzing calls for context and compliance, the bank was able to better match customers with potential products and services while simultaneously ensuring that all deals adhere to compliance rules.
Building the use case for conversational automation
While the above are among the most popular uses cases, they are by no means the only ones that drive ROI. For banks considering where conversational AI and automation might best serve their needs, West suggests looking through the lens of cost: “What number of calls, emails, chats, etc. are you taking in? How long is it taking that agent to be able to take notes and identify all the things that need to happen to close that call? How long is that call in its entirety? And what’s your cost per agent?” By identifying high-cost areas to target, banks can then create precision use cases for deploying AI and automation and tracking their success.
“It’s so important to prioritize CX. You could have the most amazing products, you could try to give the greatest service in your brick-and-mortar space; but if that digital contact center experience doesn’t match, it can really hinder your company’s ability to get where you’re trying to go.”
Kim West – Director of Product Marketing for Uniphore
