Banks must start small and ensure that incremental development enables them to learn about their systems, while a sudden, “big bang” launch should be avoided at all costs. That’s according to DNB Bank’s senior IT project manager, Carla Padró.
“You don’t actually need to have core systems integration right away, as you don’t need to have that much personalised information ready to get value for a customer. What is important is a seamless transition to an agent,” she says.
DNB Bank completed the implementation of a new chatbot solution, provided by boost.ai, in June last year. 51% of all incoming chat traffic is now being handled by the cloud-based system, according to Padró. From selection to go-live, the project took four months.
According to Padró, most of the questions which come to customer call centres and chat services are repetitive and easily answered: “I’ve seen this in most of the banks I’ve worked in. This is why DNB was able to route 50% of our traffic through the chatbot, as half of the customers are asking generic questions without needing detailed access to their accounts.”
A February 2019 survey from Uberall found that 80% of customers who have used chatbots report it as a positive experience, but also discovered that 59% of consumers had no interest in using the technology in the near future. Padró says in Norway, and across other Scandinavian countries, users are more interested in talking to bots and solving issues over chat. While Scandinavian banks might be embracing the new technology, American banks remain sceptical. According to a March 2019 Celent report, only 7% of community banks and credit unions are live with a chatbot solution, while 15% have future plans to do so.
Open Banking alternatives
There is no need for a big bang launch with new systems, or for a bank to jump headlong into trying to deploy a new technology across its entire front office in one swoop, she adds. “Things move so fast in technology and you won’t know what’s going to be the best solution in two or three years’ time. So right now, to get value from what you have already, you need to work on what you know you can have in place within a few months.
“I’m not a fan of integrating full solutions,” she says. “In Norway, like much of Europe, we have Open Banking and APIs.” The latter can be used to dredge information from the core system without having to be directly connected to it and DNB, says Padró, no longer plans to integrate whole systems into its technology stack, looking instead to API use. “If you’re going to change systems or vendors, APIs give you much more flexibility to do that than if you attempt in-house integration.”
“Being able to evolve quickly in today’s banking environment is crucial to keep pace with customer demands and remain relevant,” said Mitesh Soni, senior director of innovation and fintech at Finastra, in an email. “In the past, the choices available to technology decision makers were limited: face the operational risk and replace the bank’s legacy systems; or build in-house from scratch.
“But in the age of cloud and open APIs a more evolutionary approach is possible, removing the need for risky ‘rip and replace’ projects. In an Open Banking and PSD2 environment, the banks leading the way will be those utilising cloud-based platforms to collaborate with fintechs and other third parties – innovating their offerings one step at a time. Banks’ digital transformation efforts should revolve around building on top of their already trusted core systems – not re-inventing the wheel – and integrating with innovative service providers to help them evolve their existing offerings at pace.