ENHANCING THE BANKING CUSTOMER EXPERIENCE WITH EMERGING TECH

Falk Rieker, Global Head of Banking Business Unit

While sectors like retail have been quick to adopt new technologies to improve the experience of their customers, the finance sector has been a bit more methodical in its approach – and consumers are starting to take notice. Customers are increasingly demanding that banks and financial services institutions (FSIs) offer enhanced, personalized experiences across all service channels. This has prompted the banking sector to place increased emphasis on technologies that expedite the customer experience while still offering exceptional services.

The good news is, banks have been working hard to transform the way they do business, and a recent CapGemini study shows that customers believe their banking experiences are improving. This is a great testament to the investment and energy that has been put into transforming front end processes and services, particularly at retail banks. When examining the myriad of solutions out there, three technology trends stand out as being most influential:  IoT, blockchain and machine learning. Let’s examine these impactful technologies in greater detail to understand how they can improve the overall customer experience.

Machine Learning

Machine learning helps automate and simplify routine tasks, reducing errors and enabling business agents to focus on their core tasks. A key application for machine learning is the ticket system at customer service counters, a high-traffic place where customers are looking for a fast response and resolution. Solutions that automatically categorize customer tickets free employees from repetitive, tedious tasks – thus resolving customer complaints faster. As machine learning technologies become more integrated in banks, they will be able to better understand customer behaviors. By tailoring a specific algorithm to the individual, machine learning will recommend better, more personalized banking products to customers based on their specific demographic factors as well as purchasing behaviors.

Chatbots are another example of how machine learning will help redefine how customers interact with banks. FSIs will increasingly implement chatbots over the coming months. By using voice technology, banks can manage common queries using a chatbot while a customer service agent can focus on more unique problems that require human intellect. By tapping into the power of chatbots, banks will be able to solve customer issues much quicker, as they don’t have to wait for a live agent to become available. One example of a bank already integrating machine learning is Wells Fargo which began piloting an AI-driven chatbot through the Facebook Messenger platform. This chatbot communicates with users to provide account information and helps customers reset their passwords in a highly-efficient manner. After the initial phase, Wells Fargo plans to extend the program to a few thousand customers.

Internet of Things (IoT)

Implementing IoT-enabled technology not only allows banks to improve efficiency and productivity, but can also upgrade the customer experience. Banks are also using the IoT to monitor and collect data about their customers’ financial transactions. With automated teller machines (ATMs) for example, banks can easily analyze which areas have the highest foot traffic. A deeper analysis of this data from ATMs can enable banks to provide location-based offerings and services to their customers in real time. Using data and location-driven insights, banks can differentiate themselves by anticipating customer needs and offer advice, products and solutions to help customers make smart and financially-sound decisions instantaneously.

As the IoT expands, it also offers banks the opportunity to facilitate payments beyond the now traditional means like credit cards, mobile phones or point-of-sale terminals. This technology creates an opportunity for more transactions to eventually pass through connected devices such as wearables. In fact, 59 percent of global banking executives expect wearables to become a common payment device for consumers within two years. This shows that banks are quite forward-thinking about how these advancements in everyday technologies can directly impact the financial sector.

Blockchain

Blockchain’s decentralized, open and cryptographic nature puts customers in control of their information and ensures transparency. Blockchain offers increased speed and the data is complete, consistent, timely and accurate. The precision of blockchain also leads to unprecedented security benefits; and can be paired with the IoT to help reduce risk and fraud for banks. An IoT device can register an event that automatically triggers a business process, such as transferring funds for payment. The blockchain acts as a trusted distributed ledger that validates the authenticity of the transaction. 

In the financial sector, regulations are strictly enforced to reduce money laundering by requiring organizations to verify and identify their clients. According to a Thomson Reuters survey, FSIs can spend as much as $500 million per year to keep up with Know your Customer (KYC) and customer due diligence regulations. Blockchain would allow the independent verification of one client by one organization to be accessed by other organizations as well, which reduces administrative costs for compliance departments and increases safety for all customers.

By utilizing these technologies, banks can create a direct and positive impact on the customer experience. These emerging technologies will allow banks to provide more individualized services while also speeding up back-office processes. Banks that invest in these technologies will also benefit from increased brand loyalty and greater brand value. On the other hand, banks that fail to evolve in today’s budding digital economy will be unable to sustain growth if they overlook the power of being a customer-first organization.

Falk Rieker, Global Head of Banking Business Unit

While sectors like retail have been quick to adopt new technologies to improve the experience of their customers, the finance sector has been a bit more methodical in its approach – and consumers are starting to take notice. Customers are increasingly demanding that banks and financial services institutions (FSIs) offer enhanced, personalized experiences across all service channels. This has prompted the banking sector to place increased emphasis on technologies that expedite the customer experience while still offering exceptional services.

The good news is, banks have been working hard to transform the way they do business, and a recent CapGemini study shows that customers believe their banking experiences are improving. This is a great testament to the investment and energy that has been put into transforming front end processes and services, particularly at retail banks. When examining the myriad of solutions out there, three technology trends stand out as being most influential:  IoT, blockchain and machine learning. Let’s examine these impactful technologies in greater detail to understand how they can improve the overall customer experience.

Machine Learning

Machine learning helps automate and simplify routine tasks, reducing errors and enabling business agents to focus on their core tasks. A key application for machine learning is the ticket system at customer service counters, a high-traffic place where customers are looking for a fast response and resolution. Solutions that automatically categorize customer tickets free employees from repetitive, tedious tasks – thus resolving customer complaints faster. As machine learning technologies become more integrated in banks, they will be able to better understand customer behaviors. By tailoring a specific algorithm to the individual, machine learning will recommend better, more personalized banking products to customers based on their specific demographic factors as well as purchasing behaviors.

Chatbots are another example of how machine learning will help redefine how customers interact with banks. FSIs will increasingly implement chatbots over the coming months. By using voice technology, banks can manage common queries using a chatbot while a customer service agent can focus on more unique problems that require human intellect. By tapping into the power of chatbots, banks will be able to solve customer issues much quicker, as they don’t have to wait for a live agent to become available. One example of a bank already integrating machine learning is Wells Fargo which began piloting an AI-driven chatbot through the Facebook Messenger platform. This chatbot communicates with users to provide account information and helps customers reset their passwords in a highly-efficient manner. After the initial phase, Wells Fargo plans to extend the program to a few thousand customers.

Internet of Things (IoT)

Implementing IoT-enabled technology not only allows banks to improve efficiency and productivity, but can also upgrade the customer experience. Banks are also using the IoT to monitor and collect data about their customers’ financial transactions. With automated teller machines (ATMs) for example, banks can easily analyze which areas have the highest foot traffic. A deeper analysis of this data from ATMs can enable banks to provide location-based offerings and services to their customers in real time. Using data and location-driven insights, banks can differentiate themselves by anticipating customer needs and offer advice, products and solutions to help customers make smart and financially-sound decisions instantaneously.

As the IoT expands, it also offers banks the opportunity to facilitate payments beyond the now traditional means like credit cards, mobile phones or point-of-sale terminals. This technology creates an opportunity for more transactions to eventually pass through connected devices such as wearables. In fact, 59 percent of global banking executives expect wearables to become a common payment device for consumers within two years. This shows that banks are quite forward-thinking about how these advancements in everyday technologies can directly impact the financial sector.

Blockchain

Blockchain’s decentralized, open and cryptographic nature puts customers in control of their information and ensures transparency. Blockchain offers increased speed and the data is complete, consistent, timely and accurate. The precision of blockchain also leads to unprecedented security benefits; and can be paired with the IoT to help reduce risk and fraud for banks. An IoT device can register an event that automatically triggers a business process, such as transferring funds for payment. The blockchain acts as a trusted distributed ledger that validates the authenticity of the transaction. 

In the financial sector, regulations are strictly enforced to reduce money laundering by requiring organizations to verify and identify their clients. According to a Thomson Reuters survey, FSIs can spend as much as $500 million per year to keep up with Know your Customer (KYC) and customer due diligence regulations. Blockchain would allow the independent verification of one client by one organization to be accessed by other organizations as well, which reduces administrative costs for compliance departments and increases safety for all customers.

By utilizing these technologies, banks can create a direct and positive impact on the customer experience. These emerging technologies will allow banks to provide more individualized services while also speeding up back-office processes. Banks that invest in these technologies will also benefit from increased brand loyalty and greater brand value. On the other hand, banks that fail to evolve in today’s budding digital economy will be unable to sustain growth if they overlook the power of being a customer-first organization.