Due to COVID-19, banks have been talking to their customers more frequently and in greater detail about highly varied and dynamic financial situations. In many cases, these customers are experiencing considerable financial distress, and many are carrying more debt.
Banks' initial responses have been impressive. They've moved quickly to roll out hardship programs and assess a great many people and businesses for government-backed loans, all while implementing secure work-from-home models for large swaths of their staff. They've broken down silos and stretched internal processes to determine – and meet – customer needs.
Now that the initial shock is over, banks can take what they've learned and use it to deliver superior customer service for the long term.
Deliver quicker, more accurate, totally personalized responses
At least for now, banks are going to have to continue to cope with increased levels of customer contact. Customers are unlikely or unable to return to branches in large numbers. So, this contact is going to come by telephone, online, or mobile services. But just hiring more contact center employees isn't enough, and it's only a temporary solution. To cope both now and in the future, banks will need to make use of advanced technologies, such as artificial intelligence (AI).
AI enables banks to process customer contact more efficiently and in a more sophisticated way. For example, when banks embed natural language understanding (NLU) in their interactive voice response systems, they can 'listen' not only for customers' primary concerns, but also for their secondary and tertiary concerns, such as their liquidity or underlying financial well-being. This helps banks understand their customers' financial situations end to end and accurately assess and rate their risk levels.
NLU can also listen for distress signals, giving relationship managers a heads-up about customers in serious financial pain and allowing them to respond more empathetically. Even automated responses can be more empathetic if the algorithms have been trained that way.
Ultimately, AI that uses a greater breadth and depth of sources to get information about bank customers can triage queries more efficiently and help the bank recommend more useful, personalized solutions. This is crucial at a time when customers' financial situations are in rapid flux and can go downhill fast if banks miss important details.
Bet big on AI
Many banks are already betting big on AI-powered solutions. According to Genpact's recent study, AI 360: hold, fold, or double down (now in its third year), 39% of senior executives from the banking and capital markets industry say that their respective organizations invest more than $10 million annually in AI-related technologies. With the exception of life sciences and technology, this is a higher percentage than any other industry surveyed (figure 1).
Figure 1: 39% of senior banking executives say that their respective organizations invest $10 million or more annually in AI
Banking leaders foresee continued adoption of AI among their customer base. For example, nearly half of the senior banking executives we surveyed agree that their consumers will prefer to be served by a robot rather than a human by the end of 2021. But there's a challenge: customers may not always share the same level of enthusiasm. In fact, only 16% of consumers surveyed anticipate that they'll prefer to be served by a chatbot over a human by the end of 2021 (figure 2).
Figure 2: Senior banking executives are enthusiastic about chatbot acceptance among their consumers, but only 16% of consumers anticipate that they'll prefer to be served by a chatbot over a human by the end of 2021
Why the gap? At least in part, people have concerns about bias. The same study shows that 67% of consumers – across all age groups – say they are either very concerned or somewhat concerned about robots discriminating against them in the decisions they make (figure 3).
They are also concerned about privacy. According to the study, 66% of consumers do not want their privacy compromised, even if the end result would be a better experience.
Figure 3: The majority of consumers are concerned about robots discriminating against them
Confront concerns about privacy and bias head-on
So how can banks close the gap and deliver AI solutions their customers trust?
Well, most industry executives whose organizations have taken steps to combat AI bias believe establishing a comprehensive governance and internal control framework to be most effective (figure 4). So, if your bank hasn't already established such a framework, it would do well to consider it.
On the privacy issue, banks need to be transparent with their customers and educate both staff and consumers about what information they collect, why, and how they will protect that information and use it to benefit the customer.
Figure 4: When it comes to taking steps to combat AI bias, banks find establishing a comprehensive governance and internal control framework to be most effective
Prepare for the future today
COVID-19 has triggered a convergence of the physical and digital worlds. And things won't go back to the way they were. There's been a near-term impact. But there is also a long-term opportunity for banks to transform their omnichannel customer interactions.
More consumers are adopting digital services. And, especially if banks confront bias and privacy issues head-on, AI can help them serve their customers more effectively and efficiently – not just during COVID-19 but in the long term.