The digital future of financial services – and why AI should augment not replace

Creating superior customer experience without losing the human touch 

There has been an explosion of artificial intelligence applications in financial services as digital transformation continues to alter the landscape.

A 2017 survey found that 46% of customers skipped bank branches altogether, relying on smartphones, tablets and other online applications instead.

This industry-wide innovation is driven by the need to overcome outdated transaction technologies, process backlogged data, and provide multi-channel touchpoints with customers. And while AI has many useful applications to help address these pain points, automation alone is not a fix-all solution.

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Disruptors are entering the market at a rapid pace and the ease of switching providers has never been faster or simpler. Financial service institutions need to distinguish their brand but are facing an uphill battle to keep customers loyal for the long haul. So, what is the secret ingredient? Personalized and empathetic customer service. According to Accenture, customers want trustworthiness, high-quality customer service, and a skilled workforce aware of their needs—the top three customer satisfaction drivers in retail banking.

Solving complex customer service issues

While chatbots and AI assistants are all the buzz, these purely robotic interactions lack the emotional depth required to meet customers’ needs as they navigate financial situations that can be complex and emotionally charged. The organizations that reap the rewards of digital transformation successfully do so by using a combination of their employees and AI. By utilizing AI technology to augment employees’ skills, companies can create a cohesive environment where humans and machines collaborate to deliver the best results. For example, AI software can provide phone professionals live in-call guidance to help better recognize and respond to a customer’s emotional cues, making them more empathetic while also enhancing their performance and the customer’s satisfaction.

The crux of the matter is simple: there is no substitute for a human interaction. In fact, despite the rise of self-service options, nearly three quarters of customers will choose a human over a digital capability when seeking advice or looking to resolve a service issue or complaint, and that percentage is even higher when it relates to sophisticated inquiries. Digital assistants don’t personalize conversations, build trust, demonstrate empathy or deepen emotional connections. And if your customers can’t tell what makes your service special, there will be little holding them back from switching providers. This means your phone-based service professionals are at the heart of your brand’s customer-relationship and play a critical role in boosting customer satisfaction and long-term brand loyalty.

The importance of being empathetic

Why is empathy so important to your customer service practice and your brand? Empathy serves to create an emotional connection between two individuals, and when two people are connected, trust is developed and there is a desire to deepen a relationship. This is especially important in financial services considering 97% of customers believe it is important that a service professional demonstrates genuine interest in solving their problem and 80% are frustrated when their mood is not acknowledged.

The need for empathy is amplified when you consider the emotional implications of the financial issues customers are calling to discuss. Customer service professionals address 50+ sensitive and complex issues daily, such as insurance claims, debt collection, overdrawn accounts, fraud, investment choices and loan refinancing – all of which are best handled by a human that can understand intent, assist and alleviate the emotional burden. Empathy improves the service that companies offer, and understanding how to provide exceptional customer service is vital for all companies that wish to distinguish themselves from their competitors and achieve long-term business success.

 Defining the future of financial services

The impact of frontline emotional intelligence on the bottom line is clear. According to a study done by McKinsey, respondents reported that after a positive experience, more than 85 percent increased their value to the bank by purchasing more products or investing more of their assets; just as tellingly, more than 70 percent reduced their commitment when things turned sour.

Digital innovation within the financial service industry is inevitable, companies must focus on digitally enabling their workforce, not just automating self-service. AI’s place in the enterprise is increasingly significant and useful, but it will never be capable of replacing the value of the human touch. The brands that empower their employees to build lasting trusted relationships with their customers will be the market leaders for decades to come.

Cogito’s Steve Kraus, VP of Marketing.

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