How artificial intelligence can give challenger banks an edge

Customer churn can provide great insights into what needs to change in business. In 2016, over a million customers switched their banks in the UK. With Current Account Switch Service in effect in UK, the pace of switching is making Current Accounts look a lot like Gas & Heating suppliers. By digging deeper into consumers’ …

by | May 10, 2017 | Mindtree

Customer churn can provide great insights into what needs to change in business. In 2016, over a million customers switched their banks in the UK. With Current Account Switch Service in effect in UK, the pace of switching is making Current Accounts look a lot like Gas & Heating suppliers. By digging deeper into consumers’ reasons for changing banks, the primary determinant is poor customer service; closely followed by accessibility by 23 per cent of respondents, rewards (16%) and special offers (13%).

Collectively this is leading to a more competitive environment that favours the consumer. Customers who are leaving their current bank are clearly saying that they need more value from their banks: both in monetary and experiential terms.

Additionally, there are new service providers that are offering of cash incentives of up to £316 to join. While there are plenty of lucrative options for consumers to choose from, once they have decided to leave, the question remains as to what can be done to provide a better customer service so that they do not leave in the first place. Let us look at few easy wins.

Your call is important to us

Given the improvement in technology, the falling number of branches & branch visits, most interactions with a bank take place over the telephone or via email. The first thing people expect when they call their bank is to listen to music-on-hold (MOH). MOH has become synonymous with poor customer-service. Often people wait 10 minutes on a phone line for an answers that ends in 30 seconds.

Thankfully, advancements in natural language processing and the emergence of messaging platforms now allow companies to offer machine-driven conversational capabilities. Whilst other industries have taken a more proactive approach to the incorporation of technology into their customer offering, banking has been slower to embrace this trend across the board. This can help provide 24/7 service and a more innovative, cost-effective way of engaging with customers.

How can I help?

By asking open-ended questions – as opposed to filling a form – these bots can help find the customers’ intent. It also provides a more informal way to interact with customers and answer key questions that many high-street banks may not have time to address in-branch due to staffing levels and costs. Bots can also make recommendations to key frontline staff and encourage them to complete actions based on predictive insights.

A smarter approach to banking

These emerging technologies offer a more natural way to communicate, significantly reduce wait times by automating Q&As, better handle confidential & personally identifiable information, and also offer a better understanding of which online channels customers operate in. All these contribute to better customer services.

Overall, however, tech investment in banks have been driven primarily by cost and regulatory drivers, rather than customer experience. These have previously been considered to be mutually exclusive. Technology investments should deliver cost reduction and improved customer experience together. To achieve this, some of the old processes must be re-imagined. Enhancements in Artificial Intelligence now allow unprecedented ways to reimagine some of the processes.

There are already a number of technological processes that are used across the board such as photographic and face recognition for identity verification; computer vision for handwriting recognition on enrolment forms for faster processing times; the use of alternate data-sources alongside traditional methods for assessing credit risk; and, voice recognition for authentication that HSBC launched a few months ago. Collectively, these technological improvements can drastically cut down the call-handling and waiting times.

How did we do?

Some of the interesting applications of these technologies can help you get a very accurate sense of the customer mood. Instead of relying purely on surveys and feedback forms, it is possible to assess the tone of customer calls, sentiment in emails and the general mood in chat messages. With improvements in video analytics and effective reading of both body language and facial expressions, you can decipher how branches and counters are performing.

Today’s facial and voice recognition technology can accurately measure customer sentiment – and even demographics across the board in certain cases. Extrapolating this data from across various departments to extract the insights on the transactions that matter can in turn provide invaluable customer understanding.

So what is the AI-led transformation agenda?

AI can unquestionably transform the customer experience – both for challenger and more established banking brands – unlocking increased opportunities for improved customer retention, revenue and profitability.

Chatbots attract significant attention due to their human-like behaviours, however they are just one of the multitude of applications that can be used to implement the ground-breaking technology like machine learning, cognitive computing, natural language processing, and more. Customers have never had more choice and ease of switching – so it is down to banks to ensure they don’t give them an excuse to take their custom elsewhere. 

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