-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.
New digital first bank – Monument – announces its key technology providers
- Monument selects Mambu, Salesforce, Amazon Web Services, Persistent Systems and Accenture as key providers for its technology build
- Monument is the first challenger bank in the UK to service the unmet demands of more than 3.5 million mass affluent clients: professionals, property investors and entrepreneurs
- It is building a modern, unique, lego-like technology platform which takes best of breed SaaS providers and integrates them in a cloud based microservices architecture
- This will deliver an exceptional client experience and enable Monument to innovate and to introduce new components on a frequent basis
- Monument today announces that Mambu will be the central core banking engine in the platform alongside Salesforce for CRM, and AWS for cloud services
- Monument has also engaged Persistent Systems and Accenture Interactive to support the platform build
Following receipt of its banking licence with restriction on 6 October 2020, Monument has now signed agreements with a number of key technology providers to enable the build of its bespoke technology platform.
Monument wants to deliver exceptional client experiences by using technology solutions that are modern, flexible, easy to integrate and ultimately, if necessary, able to be replaced should the need arise. The design of its lego-like technology platform is Monument’s solution to the huge challenges faced by the legacy systems of established banks. Having assessed the market over many months, Monument concluded that no appropriate single solution existed in the market for the products and services that Monument will launch in 2021.
In addition, Monument only wishes to develop its own technology where it can deliver significant competitive advantage, for example in the mobile and web services to be used by clients. Much of the technology platform is therefore based on best of breed solutions from modern, cloud-based providers.
Mambu has developed the leading cloud banking engine which is an excellent fit for the platform that Monument is building. Similarly, Salesforce provides an industry leading CRM (customer relationship management) solution which can easily be integrated with Mambu and other solutions. AWS, as a leading provider of cloud-based infrastructure, provides a range of components to ensure the platform is reliable, scalable, secure and flexible.
To support Monument in building and integrating a platform with more than 18 different components/providers, Monument has chosen to work with Persistent Systems, a leading global solutions provider specializing in digital with extensive experience in software as a service (SaaS) solutions. To support Monument in rapidly building its mobile app and web-based channels, Monument has chosen to work with Accenture Interactive, which has significant expertise in building innovative digital experiences in both the financial and non-financial sectors.
Steve Britain, Monument’s Chief Operating Officer said:
“We have been working closely with our chosen providers for some months now, to lay the foundations for the build of our platform. We are delighted at how much we have already achieved, particularly as much of the work has been done by a highly distributed team because of COVID-19. We are now focused on completing the work to build a unique configuration of best in class software components that will make us highly flexible for the future and deliver market leading client service.”
More announcements will be made shortly as other key components of the architecture are confirmed.
Sudip Dasgupta, Monument’s Chief Technology Officer added:
“It was essential to me that we selected the strongest providers available. Those that offer us modern technology solutions with the best degree of integration that we need, together with flexibility for the future and proven operational reliability. In Mambu, Salesforce and AWS we have certainly achieved that objective and we are excited about our future engagement with them. Equally, as we rapidly build our platform for launching with clients in early 2021, we wanted support from providers who have been on this journey before and in Persistent and Accenture Interactive, I am delighted to say we have found that.”
Monument will be the only bank to offer its clients an entirely digital journey for buy-to-let and property investment lending of up to £2million. It will offer market leading, top quartile savings rates and its model is designed to reward loyalty. So, if a saver deposits money for a subsequent fixed term, they will get a better rate than a new customer. And a borrower who renews their loan will also be offered a favourable rate.
UKRSIBBANK, part of BNP Paribas Group, announces a strategic partnership with financial wellbeing startup Dreams, to enhance the digital user experience of its 2 million customers in Ukraine
- The technology powering popular consumer app, Dreams – which has helped 460,000 users save over 440M EUR – will be made available to UKRSIBBANK’s users in Ukraine.
- Through the integration of the Dreams platform within UKRSIBBANK’s own digital tools, customers of the bank can set and achieve money-saving goals, track and improve their financial lives.
Dreams (https://www.getdreams.com/en/b2b/), the Stockholm-born fintech empowering millennials to save and feel better about their money, today announces a strategic partnership with Ukrainian commercial bank UKRSIBBANK, a subsidiary of French international bank BNP Paribas Group.
This partnership follows the announcement earlier this year of Dreams’ first enterprise partnership with banking software provider Silverlake Symmetri, and the recent unveiling of a new department in Stockholm dedicated to the development of Dreams’ B2B partnerships. The announcement marks an expansion of the company’s business model as it consolidates its B2B offering and evolves its services as a provider of white label solutions for financial institutions.
Through the integration within UKRSIBBANK’s own digital tools of the Dreams Platform – which is rooted in scientific principles – customers can set and achieve money-saving goals through clever, automated saving features, in addition to nudges and saving hacks.
The Dreams Platform will be included as part of UKRSIBBANK’s digital banking offering for its 2 million+ customers, and is set to grant millions of potential consumers across Ukraine access to products which will help keep their finances on track and improve their financial lives.
The rise in digital self-help tools has long been anticipated by Dreams and forward-thinking financial institutions. The current global economic uncertainty brought about by the COVID-19 pandemic has also placed significant strains on people’s finances, and the demand for better personal finance tools has only accelerated. The partnership with Dreams is welcomed by UKRSIBBANK which is currently striving to equip its customers with the best possible banking solutions whilst helping them achieve a more sustainable lifestyle.
Dreams is firmly established as an authority in its industry, having launched its consumer-facing app in its native Sweden in 2016 and Norway in 2018 – where it has already achieved a 16% market share of all 20-39 year olds.
Henrik Rosvall, CEO and founder of Dreams, comments: “It’s a true honour to be partnering with UKRSIBBANK and BNP Paribas Group, and we’re incredibly excited to be introducing the Dreams solution to UKRSIBBANK’s customers and the wider Ukrainian market.
“Dreams and UKRSIBBANK can now lead the charge, with BNP Paribas Group’s corporate strategy having shifted in recent years to focus on guiding customers towards responsible consumption and sustainable personal finance management. I’m confident that our mission of helping millennials save more and feel better about their money makes us the ideal partners.
“Our financial wellbeing platform – which is built upon behavioural science and personal finance management principles – will provide the perfect tool for UKRSIBBANK to help its customers make better financial choices and become more sustainable in the way they handle their finances. This partnership will also help UKRSIBBANK safeguard the loyalty of its customers and futureproof its digital banking offering against a growing number of challenger banks and fintechs.”
Konstantin Lezhnin, Head of Retail at UKRSIBBANK BNP Paribas Group, comments: “I believe that banks have a role to improve their customers’ lives. Planning and saving for important life events improves our quality of life by reducing stress levels, and we wish to make our customers feel more confident and in-control of their lives.
“UKRSIBBANK has always applied innovative ways to assist our customers in financial planning, so we are very happy to now be working with Dreams, the best European player in behavioural savings. They have an extremely solid track record in Sweden and Norway based on scientific research, so we are confident that this partnership will work positively for our customers in Ukraine. This also demonstrates our strategy to cooperate with startups and innovative companies that seek ways to expand their operations.”
Three times as many SMEs are satisfied than dissatisfied with COVID-19 support from their bank or building society
- More SMEs are satisfied (38%) than dissatisfied (13%) with their COVID-19 banking support
- Decline in SMEs using personal current accounts for business banking as more seek access to the Government-backed lending scheme
- Fewer SMEs believe nearby branches are important when choosing a bank or building society
- 15% of SMEs use mobile or online banking more often than before the COVID-19 pandemic
- When SMEs do look to switch, low or no charges for business banking remains the most important factor (47%) in selecting a new account
Three times as many SMEs have been satisfied than dissatisfied with the COVID-19 support available from their bank or building society, according to YouGov research commissioned by the Current Account Switch Service.
Overall, four in ten SMEs (38%) were satisfied with the support they received from their business current account provider since the pandemic began. This contrasts with one in ten SMEs (13%) who were dissatisfied. In general, more than half of SMEs (55%) are satisfied with their current business bank account, compared to 8% who are dissatisfied. However, inertia remains a problem as half of SMEs (50%) said they would not look to switch business accounts even if they were dissatisfied with their current bank or building society.
When SMEs do look to switch, low or no charges for business banking remains the most important factor (47%) in selecting a new account. Advanced digital features (35%), good interest rates (34%), and a personal connection through a relationship manager (33%) also mattered.
The SME banking research was conducted both in February and in September 2020. It also reveals that since the start of the pandemic, the proportion of SMEs using business current accounts has increased from 69% in February to 74% in September as firms are required to have a business account to receive access to the Government-backed lending schemes.
However, one in five SMEs (20%) still use a personal current account for their business banking needs, despite the risk that tax liabilities get confused, and calculations are made incorrectly. These businesses are also missing out on a range of business-only banking benefits such as integrated accounting software or invoicing tools offered by different providers.
In addition, the research shows the importance of branches to SMEs has declined over the seven months. When asked in February, more than a fifth of SMEs (22%) said the availability of nearby bank branches was important when selecting their bank or building society, compared to 17% in September. However, the Post Office could be fulfilling the role of branches in some areas.
The declining importance of nearby branches was most noticeable in the North East region where 35% of SMEs believed branches were important in February, falling to 18% in September. The importance of nearby branches also varies between industries. One in ten IT companies (11%) said nearby branches were an important factor compared to nearly three in ten (29%) leisure and hospitality businesses.
While branches are less important, digital banking use has increased for some SMEs. Several firms have started to use online banking for the first time as 15% of SMEs say they use mobile or online banking more often than before the social distancing measures were introduced.
Maha El Dimachki, Chief Payments Officer of Pay.UK, owner and operator of the Current Account Switch Service, said: “Across the country, banks and building societies have been working hard in difficult circumstances to meet customer needs. Thanks to that work, small and medium-sized enterprises are more likely to say they are satisfied than dissatisfied with the support they received from their business account provider since the pandemic started. But lockdown has changed small business behaviour dramatically, in a way that points to significant changes to their banking needs both now and in future.
“It’s encouraging to see many small businesses are generally satisfied with their business bank accounts. However, even when businesses are unhappy with their bank, some don’t consider switching as an option, despite the many benefits available. We’ll continue to raise awareness of the benefits of switching among small businesses to help them get the most from their bank account.”
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