Banks are racing to transition the majority of customer service to conversational AI. That may be a mistake.
Conversational AI has gotten a lot of buzz lately, and for good reason. As lockdowns closed bank branches and pushed banking online, chatbot and virtual agent usage soared.
Bank of America’s AI financial assistant “Erica,” for example, gained one million users from March through May. A free chatbot available in the BofA app, Erica uses predictive analytics and natural language to provide account balances, execute transfers, send money over Zelle, and even schedule meetings with financial advisors. The AI bot communicates with customers via voice, text, or through tappable prompts that appear on a mobile phone’s screen.
Chatbots like Erica are commonly found in fintech. Their automation standardizes customer service, generates business intelligence, and reduces strain on a bank’s resources. However, those benefits come at a price.
Money is an emotional topic. Customers may reach out to banks for any number of exciting or difficult reasons, from buying a home to the loss of a family member. Personal finance is a touchy subject, and handing customers off to a robot can feel, well, impersonal.
Many banks are turning to conversational AI to take on the heavy lifting of customer support as social distancing mandates stretch on. Some see AI as an exciting way to achieve cost reduction and replicate popular customer experiences with disruptive fintech. What they may not see are the costs of trying to make robots do human work.
Conversational AI gets mixed reviews. A survey by Capgemini found that half of polled customers feel that AI-powered financial interactions do not provide value. Additionally, 57% of customers don’t feel incentivized to share personal data with AI tools. Ouch.
Part of the problem lies in the Uncanny Valley, where AI is so human-like that it’s almost too close for comfort. No matter how close it gets to imitating us, AI isn’t human, and as a result it will always fall just short of feeling like a personal interaction. When that happens to a customer who is sharing private information and is emotionally invested in the conversation, the shortcoming can result in a deep loss of trust.
Banks have a long, necessary history of building trust and providing excellent customer service that fintech doesn’t have. Their move to conversational AI reflects the right intentions: the Capgemini survey found that 94% of banking and insurance executives said that improving customer experience was the main objective of their AI initiatives.
Clearly, financial leaders care. The trick is making sure customers know and feel that in an age of distanced communication.
Customers trust their banks when they trust the people inside them. A better option for safe banking and connecting in a socially distanced world would be something that combines the convenience of AI and virtual banking with person-to-person interactions.
Enter: video and chat banking.
Connecting with customers via video and chat allows banks to continue to provide quality experiences and personal connection during a time when in-person branch visits are not ideal or possible for everyone. These chat methods afford customers the empathy and sense of privacy needed to have sometimes difficult conversations about finances.
Citi launched video banking this year with the help of a familiar internal tool: Zoom. Personal bankers, relationship managers, and branch managers across the country now offer Zoom as one way to meet when they reach out to customers. Employees use DocuSign and two-factor authentication to ensure security, allowing customers to open new accounts, get financial advice, and apply for loans. Customers report enjoying seeing their bankers face to face even though branches are closed.
Taking a different route, HSBC customers with compatible Apple products can now chat with representatives through Apple Business Chat, Siri, Apple Maps, and Apple Spotlight. The option to send a text rather than make a call appears as the customer starts dialing the bank’s number into their device or when they select a branch from an online search. Once connected, customers can move money, manage checking and savings accounts, handle credit card transactions, and receive digital banking assistance all within the chat thread. This is all possible thanks to LivePerson’s Conversational Cloud Platform, and a beta version for businesses is also available.
These approaches scale existing customer support, taking it to new levels. Conversational AI can certainly play a role here, ensuring that customers always have a means of quickly connecting to a form of support, getting answers that can be pulled automatically, and exploring hypothetical financial options if they’re not ready to talk to a representative yet.
Once a customer is ready to take a big financial step, conversational AI can connect them to a human—and even provide the representative with an idea of what the customer is looking for based on their activity.
It’s a bit surprising that banks haven’t moved en masse to video and chat appointments even though the technology exists. Eighty-five percent of consumers who use video chat for a financial activity say they’d use it again, and customers under age 45 are twice as likely to be comfortable using the technology compared to those over 55.
There is also a huge opportunity here to give customers access to all their records and previous interactions through any mobile device or computer. Before virtual banking, the siloed departments of bank branches made that difficult. The convenience of revisiting stored chats and pulling up virtually signed documents for all financial products on command is hard to beat.
Perhaps most importantly, in a time where FinTech companies threaten disruption, human interactions aided by technology provide a competitive advantage. Banks have the ability to scale existing customer service in a way FinTech simply can’t right now.
Rather than seeing customer service as a cost that needs to be reduced through AI, banks should invest in and experiment with tech that delights customers and builds trust and loyalty. Regardless of whether it produces short-term profit, the long-term connection is well worth it.
Sandeep: Tell me a bit about the early part of your career.
Tom: I spent a decade helping to build start-ups focused on application and database software. This was where I learned how to sell and do business development. I was fortunate to be part of one company going public and another being sold to IBM.
Sandeep: What is something you learned during this time that helped you with consulting?
Tom: I began to appreciate how different customers achieved varying levels of success with the same foundational technology. This made me understand just how critical getting your team and process right can be.
Sandeep: This is something I only came to appreciate years into consulting, especially after the sale of my first consultancy to Capital One.I saw teams in different parts of the company trying to solve challenges like real-time messaging. Same corporate culture, same technology, same internal support mechanisms. Night and day outcomes.
Tom: We saw a lot of the same thing after selling our practice to EMC (sold to Dell in 2015). This is probably the thing I'm most proud of when it comes to the teams I've helped to build: the ability to perform well in a variety of contexts, sometimes in ways that inspires the client team to up their game as well.
Sandeep: Yes. It's particularly cool to see your team succeed in individual ways after an acquisition...consulting skills definitely translate into the corporate environment.
Tom: Totally. We have people who've stayed on at Dell and risen up the ranks, while others took the opportunity to become successful executives at other Fortune 100 companies....or to start their own agencies and startups.
Sandeep: We've both been around a while. My first consulting project was a Y2K thing for Cisco back in 1998. You've been around a little longer than that :). How do you think consulting has changed most during the past five years?
Tom: I think because there is so much infrastructure available now, consulting has become more delivery and outcome-oriented. A better blend of strategic and tactical. Public Cloud has also enabled velocity to increase at a pace unfathomable 5 years ago.
Sandeep: What has stayed the same?
Tom: It's still mostly about people. People who thrive on change and are focused on their personal and professional development. I love that this has not and will not change...it's what I love about consulting.
Sandeep: I know you're adjusting your work style to COVID. You're still a dude who clearly prefers to drive an hour for a socially-distanced hike or outdoor meeting over Zoom any day of the week :) But personal styles aside, what is specifically compelling about a remote agency during the era of COVID?
Tom: Kunai has been remote for years, which gives them an inherent advantage. There is something about the communication and management styles that just works in a way that other organizations are still figuring out.
Sandeep: Yeah, I think what a lot of people fail to realize is that remote work isn't just office work over Zoom. it's an entirely new paradigm. There needs to be an understanding for asynchronous efficiency...and this just takes time and effort to develop. How do you approach remote work and family? What are you learning about separating work and personal time?
Tom: No matter what the form of interaction, Focus. Be present. Quality over quantity. The best weeks are the weeks where I proactively schedule work and personal time. Neil (Kunai's Head of Delivery) shared a great quote with me "With discipline comes freedom." When I am proactively addressing the majority of my professional and personal commitments, I find I earn a little flexibility. A little freedom.
Sandeep: Tell us about a business hero of yours that I may not have heard of before.
Tom: Paul O'Neill is someone you may not know. His work in both the public and the private sector created a profound impact
Sandeep: We are both over forty years old :). How have you learned how to work smarter during the past decade or so? What do you wish you knew about consulting when you were 25 that you know now?
Tom: Consultants want to make lasting change. Lasting change is often not the act of a single person. Today I work much harder bringing others along on the journey.
Sandeep: Last question. What are you doing here? :) Why join a small consulting company this late in your career when you could have a cushy job somewhere else?
Tom: I love a good challenge personally and professionally. When I turned 40, I decided I would run a 10K every Thanksgiving weekend and try to have my finishing time be less than my age. With the exception of one year where I did not run due to a health issue, I have met the goal. I also recently completed the Leadville 100 Mountain Bike race. So, I guess I'm here because I'm a glutton for punishment :) Jokes aside, our customers have a job to do and I intend to put Kunai in a position to execute flawlessly on their behalf. I love committing jointly to audacious goals for our customers and our business.
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