The Evolving Interface

-banking on conversational AI  –

 By Cathal McGloin

Rise of the conversational interface

 When it comes to customer service, consumers drive the conversation. Adoption of household gadgets such as Amazon Echo, Apple Siri and Google’s artificial intelligence (AI) voice assistant, which is embedded into billions of smartphones, have created a new voice-activated interface where customers can engage and interact via chat.

Add to this the move that consumers have already made to communicating via messaging apps, from Facebook Messenger to WhatsApp, Slack and SMS, and we can see that the age of  conversational user interfaces is upon us.

Using natural language as a means of engagement, customers will be able to transact, interact, purchase, and make requests across multiple channels and consumer touchpoints, with less need for a human to be involved. This conversational AI represents a whole new opportunity for consumer-facing industries to create memorable experiences, strengthen brand loyalty, and lower delivery costs.

 From ATM to AI

We believe that the integration of conversational AI will be the next banking interface. The move to automated banking began almost half a century ago with the introduction of ATMs. For routine transactions, customers got used to interacting with screens rather than bank employees. But that interface is rapidly changing as consumers look to voice-activated devices and messaging as a convenient form of engagement. They won’t want to have to sift through their bank’s website to try and find where and how to report fraud on their credit card, or apply for an increase on their credit card limit, or get a breakdown of their recent transactions. Instead, they will be able to ask their banking bot, via the chat interface, to get them the information or execute the necessary tasks to fulfil their particular banking need.

 While convenient, the ATM and other banking innovations have often made the banking experience more impersonal. With conversational AI, banks can bring chat back into the banking relationship and really understand what their customers want. Rather than second guessing them, they can allow the customer to quickly find what they are looking for themselves, or bring them through a series of pre-configured menus or forms.

Mobile banking overtaking online transactions

Just eight years after the iPhone was launched, Ofcom declared, ‘The UK is now a smartphone society.’ Mobile transformed the way that consumers engage with high street banks and lowered the barrier to entry for challenger banks and payment providers. Now, the increased use of voice-activated interfaces and messaging apps is leading to the importance of smart conversations as the next competitive battleground for customer engagement.

Mobile ubiquity has enabled a slew of new business models that are built around customers’ lifestyles. The ING International Survey Mobile Banking 2018 polled 15,000 people in 15 countries and found that 61% of European smartphone users use their mobile device to do their banking: a 13% increase in since 2017. Two thirds (66%) have made a mobile payment in the past year, up from 58% in 2015. Banking consumers are tech-savvy and have demonstrated their readiness for better and more convenient ways to get things done.

The millennial generation, which has grown up with digital technology, has different customer service expectations and tends to be less loyal to financial service providers. Banks continue to be under pressure to retain and grow their customer base, upsell and cross-sell different products and services and engage across multiple communication channels, as preferred by their customers. They have to continuously innovate to build strong brand relationships and customer conversations are at the heart of this.

Traditional banks have faced new competition from start-up ventures such as Starling and completely new sectors, including technology vendors like Google, Apple and Facebook; mobile network operators including Orange; and retailers such as Tesco and Amazon. The race will continue as banks and other new entrants to the financial services market innovate using conversational AI.

 Convenience is king 

Owing to cloud computing technology, higher data processing power, and open sourcing by organisations such as Google and Amazon, artificial intelligence is now more accessible. As a result, we believe that conversational AI-based solutions will be fundamental to the next wave of banking innovation around customer engagement.

Consider the case of a payment card provider being able to provide immediate service to customers who request an increase in their credit card limit via a chatbot, allowing them to make a purchase while avoiding extra charges. The same chatbot platform can offer another customer the option to convert an agreed amount into the currency of the country that they are visiting on a weekend break.

Or think of an insurance provider that is able to make the customer onboarding process transparent and efficient: requesting necessary documents and providing approvals, all within a single conversation. Customers like frictionless processes. A chatbot can reduce multiple interactions to one seamless conversation that can execute the necessary business tasks required to complete the customer journey successfully. This is why conversational user interfaces, powered by AI, will be so powerful in financial services.

Digital consumers drive expectations 

The growth of mobile and messaging apps has created consumers who are used to having everything connected 24/7 and interacting via swipes. This generates increasing volumes of customer interactions that need to be handled, as well as higher user expectations for service delivery. Without modern technology and approaches, the operational costs associated with servicing the new digital customer are prohibitive. Bots are enabling banks to surmount this challenge.

However, no matter how intelligent bots may be, they are still prone to a lack of emotion or personality and a degree of error and confusion that can result in customer dissatisfaction. This begs the support of an agent-assist model where bots can hand off to a human agent when necessary.

Augmented customer service 

The Bank of England’s chief economist recently warned that the rise of AI could lead to a ‘hollowing out’ of parts of the jobs market, with manual, repetitive roles particularly vulnerable to automation. However, he countered this by stating that “jobs focused on skills of human interaction, face-to-face conversation, and negotiation, would be likely to flourish.”

Where customers need counselling, or comforting, empathic employees must be available to them. 

Whenever automation and AI are mentioned, the obvious question is what is the human cost?

A study conducted by London Goldsmiths University found that organisations that continue to invest in development of employees’ skills, alongside their automation strategies and implementation, are around 30 per cent more productive than those that concentrate on automation at the expense of human resources.

Whereas some customer interactions, such as requesting an account balance, can be very basic and lend themselves to complete automation, 24/7 self-serve business processes often require complex rules-based workflows. While some of the tasks in these workflows may lend themselves to automation via AI or bots, there will also be the need for services to be delivered by specialists and for sensitive or complex interactions to be handled by experienced customer service agents. We believe that financial services employees will come to the fore managing the tasks that cannot be trusted to a bot and adding value to interactions, such as identifying upselling or cross-selling opportunities, or tracking engagement analytics and stepping in where needed.

To engage with their bank, customers used to push oak panel doors, now they push smartphone buttons, within five years they’ll simply chat via the nearest gadget.