How Artificial Intelligence Can Deliver a Personalised Banking Experience That Drives Customer Devotion

By Mark Jackson, Head of Financial Services,Collinson Group

With the evolution of digital banking, there are fewer opportunities for face-to-face interactions with customers.Is it therefore becoming harder to drive customer devotion, attracting and retaining loyal customers in this era of digital self-service? Banks are investing huge amounts of capital in digital capabilities such as chatbots,artificial intelligence (AI) and open APIs.According to Goldman Sachs, machine learning and AI will enable £26 billion to £33 billion in annual “cost savings and new revenue opportunities” within the financial sector by 2025. The availability of new technologies such as cloud computing and machine learning algorithms have created the perfect conditions for the expanded use of AI in banking. So much so that the Royal Bank of Canada announced it would explore how to better integrate machine learning, and JPMorgan Chase recently hired a global head of machine learning from Microsoft.

Mark Jackson

However, the increased use of AI does not have to mean a less personalised experience for customers, for banks trying to maintain customer loyalty, increase Customer Satisfaction and Net Promoter Scores– it is essential that it does not. We examined the banking motivations of the affluent middle class in Brazil, China, India, Italy, Singapore, the United Arab Emirates, USA and UK. When it comes to this highly desirable segment, nearly two-thirds expect greater recognition and reward from banks in return for their loyalty. We found that those who feel loyal to a bank are 72% more likely to purchase a product from them in the future, and 70% would be prepared to recommend a banking brand to their friends and family. Furthermore, if a customer purchases additional products through their bank, over half are less willing to switch provider.

Improving digital experiences

There are many opportunities for AI to recognise customers, offer personalised experiences,services, and build loyalty by offering suggestions based on customer behaviour. AI can use transactional and other data sources to help banks understand customer behaviour to improve their experience, to ultimately encourage them to use their payment cards –ahead of a competitor’s –more frequently. For example, if a customer uses their bank card to book a flight, AI could help to suggest relevant, personalised and contextual offers to the customer, linked to their card. This could be anything from an offer for an Uber to get to the airport or an Airbnb at their destination, to travel insurance or retail offers at the customer’s departure airport. If AI can make it easier for banks to analyse and understand customer preferences, and if the bank is able to use this knowledge to personalise the offers and services it provides,it will increase brand loyalty, encourage repeat business and generate incremental revenue for financial organisations.

AI can also drive efficiency allowing contact centre employees to act in a more consultative, advisory capacity.When chatbots are deployed to automatically handle basic calls to update personal details or answer more common questions, this can free up customer service agents to spend more time talking to customers about complex problems and providing more tailored advice about services. Financial organisations could utilise these interactions with customers to offer improved financial advice and planning and capture additional lifestyle data for future product and service offerings.

AI enhanced in-person interaction

Although customers are increasingly comfortable using digital financial services, some still want face-to-face interactions with their banks. When we asked how the global mass affluent customer likes to bank, more than a quarter (26 percent) said that they prefer to visit a branch, 24 percent bank via an app, 29 percent favour using a website and 21 percent showed a preference for the phone.

Much of the talk about AI in banking has been about how technology can replace some functions currently performed by humans. However, AI could also help banksserve their customers more effectively by giving them easier access to relevant information.

This year,U.S. Bank announced the formation of an artificial intelligence enterprise solutions unit, which sits inside its payments, virtual solutions and innovation group.The bank has begun experimenting with how AI can serve customers that have product, service or loyalty programme-related queries that are not frequently asked. Machine learning will ensure that over time these less typical queries have readymade responses, versus the current situation where advisors often have to consult experts in another department to provide immediate advice. If AI could contain an encyclopaedic knowledge of U.S. Bank’s offerings, advisors could quickly provide relevant information, enhancing the overall customer experience.

Nordea bank also recently introduced artificial intelligence technology, which analyses customer text queries and automatically forwards them on to the relevant person in the correct department. The software can process hundreds of messages a second, speeding up response times and improving customer service. It is worth noting that customer experience is most often cited as the reason customers feel loyal to a brand and remains critical to retaining profitable customers

Finally, AI is also playing an important role in fraud prevention, helping to analyse customer behaviour to anticipate or identify fraudulent purchases. It can also be combined with real-time voice recognition to authenticate the customer, or run a voice sample through a database of known fraudsters to prevent fraudulent activity.

Final thoughts

In the dynamic and aggressively competitive environment that organisations operate today, financial services brands need to work harder to understand their customers, to engage with them, to reward them appropriately and ultimately retain them. Through the effective application of AI,banks can leverage technology to offer enhanced products, services, communications and programmes that achieve the ultimate in customer behaviour – devotion to a brand.

By Mark Jackson, Head of Financial Services,Collinson Group

With the evolution of digital banking, there are fewer opportunities for face-to-face interactions with customers.Is it therefore becoming harder to drive customer devotion, attracting and retaining loyal customers in this era of digital self-service? Banks are investing huge amounts of capital in digital capabilities such as chatbots,artificial intelligence (AI) and open APIs.According to Goldman Sachs, machine learning and AI will enable £26 billion to £33 billion in annual “cost savings and new revenue opportunities” within the financial sector by 2025. The availability of new technologies such as cloud computing and machine learning algorithms have created the perfect conditions for the expanded use of AI in banking. So much so that the Royal Bank of Canada announced it would explore how to better integrate machine learning, and JPMorgan Chase recently hired a global head of machine learning from Microsoft.

Mark Jackson

However, the increased use of AI does not have to mean a less personalised experience for customers, for banks trying to maintain customer loyalty, increase Customer Satisfaction and Net Promoter Scores– it is essential that it does not. We examined the banking motivations of the affluent middle class in Brazil, China, India, Italy, Singapore, the United Arab Emirates, USA and UK. When it comes to this highly desirable segment, nearly two-thirds expect greater recognition and reward from banks in return for their loyalty. We found that those who feel loyal to a bank are 72% more likely to purchase a product from them in the future, and 70% would be prepared to recommend a banking brand to their friends and family. Furthermore, if a customer purchases additional products through their bank, over half are less willing to switch provider.

Improving digital experiences

There are many opportunities for AI to recognise customers, offer personalised experiences,services, and build loyalty by offering suggestions based on customer behaviour. AI can use transactional and other data sources to help banks understand customer behaviour to improve their experience, to ultimately encourage them to use their payment cards –ahead of a competitor’s –more frequently. For example, if a customer uses their bank card to book a flight, AI could help to suggest relevant, personalised and contextual offers to the customer, linked to their card. This could be anything from an offer for an Uber to get to the airport or an Airbnb at their destination, to travel insurance or retail offers at the customer’s departure airport. If AI can make it easier for banks to analyse and understand customer preferences, and if the bank is able to use this knowledge to personalise the offers and services it provides,it will increase brand loyalty, encourage repeat business and generate incremental revenue for financial organisations.

AI can also drive efficiency allowing contact centre employees to act in a more consultative, advisory capacity.When chatbots are deployed to automatically handle basic calls to update personal details or answer more common questions, this can free up customer service agents to spend more time talking to customers about complex problems and providing more tailored advice about services. Financial organisations could utilise these interactions with customers to offer improved financial advice and planning and capture additional lifestyle data for future product and service offerings.

AI enhanced in-person interaction

Although customers are increasingly comfortable using digital financial services, some still want face-to-face interactions with their banks. When we asked how the global mass affluent customer likes to bank, more than a quarter (26 percent) said that they prefer to visit a branch, 24 percent bank via an app, 29 percent favour using a website and 21 percent showed a preference for the phone.

Much of the talk about AI in banking has been about how technology can replace some functions currently performed by humans. However, AI could also help banksserve their customers more effectively by giving them easier access to relevant information.

This year,U.S. Bank announced the formation of an artificial intelligence enterprise solutions unit, which sits inside its payments, virtual solutions and innovation group.The bank has begun experimenting with how AI can serve customers that have product, service or loyalty programme-related queries that are not frequently asked. Machine learning will ensure that over time these less typical queries have readymade responses, versus the current situation where advisors often have to consult experts in another department to provide immediate advice. If AI could contain an encyclopaedic knowledge of U.S. Bank’s offerings, advisors could quickly provide relevant information, enhancing the overall customer experience.

Nordea bank also recently introduced artificial intelligence technology, which analyses customer text queries and automatically forwards them on to the relevant person in the correct department. The software can process hundreds of messages a second, speeding up response times and improving customer service. It is worth noting that customer experience is most often cited as the reason customers feel loyal to a brand and remains critical to retaining profitable customers

Finally, AI is also playing an important role in fraud prevention, helping to analyse customer behaviour to anticipate or identify fraudulent purchases. It can also be combined with real-time voice recognition to authenticate the customer, or run a voice sample through a database of known fraudsters to prevent fraudulent activity.

Final thoughts

In the dynamic and aggressively competitive environment that organisations operate today, financial services brands need to work harder to understand their customers, to engage with them, to reward them appropriately and ultimately retain them. Through the effective application of AI,banks can leverage technology to offer enhanced products, services, communications and programmes that achieve the ultimate in customer behaviour – devotion to a brand.