A human touch will be key post pandemic

By Niels Pedersen, senior lecturer at Manchester Metropolitan University and the author of ‘Financial Technology: Case Studies in Fintech Innovation.’

Although COVID-induced lockdowns have accelerated digitization in many sectors, customers still want to interact with other human beings.

Oscar Wilde once said, “When most people agree on something, they are usually wrong”. That sentiment struck me as I walked past a bank branch recently on a rainy winter morning. There was a long line of customers outside the bank, and it was at a standstill.

How wrong they were, I thought, for wasting their time in a queue. We have mobile-only banks, so why don’t they just bank online?

Then it struck me that these people may not have had a choice. Yes, tech-savvy consumers use banking apps, but not everyone is willing, or able, to do that. In fact, according to a recent study by Lloyds Bank, roughly 9 million people in the UK are unable to use the internet without help from someone else.

Could technology lend a helping hand?

No doubt, technology can help some of those people. For example, US-based D3 Banking Technology has built a voice-based banking interface on Amazon’s Alexa. With their voice, customers can check account balances, move money, and review their financial goals. This spares them the hassle of using a screen-based interface, which may be particularly welcome to less tech-savvy consumers, such as the elderly.

However, digital innovations are rarely without problems. In the case of voice assistants, they sometimes mishear user inputs. To address this, users have to simplify their commands, hyper-articulate them, or repeat themselves, creating a new layer of inconvenience.

A human touch will help

Providing a human touch during these interactions makes good business sense. According to some research, user journeys that involve contact with other human beings exhibit higher rates of customer retention than those that do not.

That said, such contact does not always have to involve a human being: images of people influence user behaviour too. This is why politicians put pictures of themselves in their electoral propaganda. Adding a face to a name builds trust.

This intervention does not even require the image of a person either. In some instances, a mere trace of humanity is enough to affect customers. For example, one study found that placing an image of a pair of eyes above the moneybox in a self-service coffee bar increased payments almost threefold.

Thus, any financial innovation worth its salt should employ a human touch as part of the customer journey.

Niels Pedersen

Where to find the staff

According to McKinsey, tasks consuming 45% of staff time across all professions are fully automatable. This means that financial institutions will soon need to redeploy otherwise redundant staff. How about using these people to improve user experiences across the board and increase customer loyalty?

To be effective in this undertaking, financial institutions must deploy staff to those parts of the user journey where customers feel the greatest uncertainty. In this regard, ‘customers’ can be internal to. When deploying innovations within organizations, end-users that are employees may also need personal support.

Human interaction in the new normal

With the accelerating digitization of the economy, there is a greater need for a human touch in many domains. The use of new technologies and faster pace of change creates uncertainty, which, in turn, increases this need.

What’s more, because of the lockdowns, digital fatigue has increased. When consumers already spend a lot of time in front of screens for work, their appetite for doing this in their free time has decreased. Thus, by providing a human touch, there is an opportunity for financial institutions to differentiate themselves in the eyes of their customers.

Moreover, as similar design interventions are used to optimize digital engagement across the industry, there is a risk of overuse. Consumers notice patterns. Exposing them to engagement techniques that they have seen before will turn them off.

This is the reason you are hesitant to open emails with the word ‘FREE’ in the subject line. When too many digital interfaces use the same tricks to engage customers, these start to feel disingenuous – in an increasingly cynical age, many consumers have become very efficient at spotting this.

Not everyone is the same

It’s time for the financial sector to recognize that change is needed. Spare your customers the marketing platitudes and corporate speak, because they’ve heard it all before. Instead, delight them with a well-placed human touch.

For different consumers that can mean different things. I, for instance, bank with First Direct because they pick up the phone any time of day. And when it comes to mobile banking, I type all day, so what makes them think I want to bank via a chat bot?

However, I am not every consumer. Everyone is different. Therein lies the key challenge for financial institutions: personalizing their solutions to cater to individual needs, while providing just the right amount of human contact. In addition to segmenting customers by their income, age, and location, is it time to classify them according to how much of the human touch they require?

About Niels Pedersen

Niels Pedersen is a Chartered Accountant and Senior Lecturer at Manchester Metropolitan University, the home of England’s first, and longest-running, post-graduate financial technology course. Before coming to academia, he worked at PwC and the Bank of England. His thoughts have been featured in Newsweek and on BBC Radio Scotland. His first book, Financial Technology: Case Studies in Fintech Innovation was released on December 3 2020.