How customer demand is fuelling AI-deployments and ‘appification’ in the banking sector

By Martin Linstrom, Managing Director UK & Ireland at IPsoft 

Many businesses view artificial intelligence (AI) as a way to improve customer service, particularly financial organisations battling for customer loyalty. One recent survey found that more than 90% of leading global brands use AI to increase customer satisfaction, with many moving beyond simple chatbots to more sophisticated AI solutions.

In 2019, these efforts will take an even greater priority within financial services firms looking to bring AI-powered intelligence into applications and services, all in the aim to deliver higher-value customer experiences (CX).

Many banks will look at the “appification” of AI – where some form of AI is infused into virtually every consumer-facing channel, particularly mobile applications – as a point of competitive differentiation.

Customer-centric banking

During the last decade, the consumer banking experience went digital with the addition of consumer messaging across websites, mobile applications and social media. However, despite substantial investment into these channels, customer experiences in the financial sector remain disjointed. Banks still need to connect financial channels and customer data to reduce silos and make it easier for consumers and agents to quickly access the information they need – particularly when it concerns sensitive personal data.

Innovative CX is critical for banks competing for customer loyalty, and they should not overlook the importance of continuing to make websites, mobile banking applications and access to customer service increasingly user-friendly. By putting the customer first, banks can responsibly influence spending and lending behaviour and drive business growth, as well as encourage greater customer loyalty.

In 2019, CX initiatives will be part of broader company wide efforts to digitally transform and innovate as quickly as possible, and banks will invest in technologies that align with these goals. Remarkably, it is the investment in mobile banking applications that will drive this transformation of customer experience, with a recent survey revealing that mobile apps have become the UK’s most popular banking channel – unsurprisingly, at the expense of the online banking via web browser.

Fintech and challenger banks are posing the greatest threat to the level of customer service currently offered by high-street banks, all by fulfilling consumer demands and fuelling the uptake of mobile app banking. This year, legacy banks must thoroughly align their digital transformation and customer experience initiatives. 

Banking as the poster child for AI ‘appification’

Banks and financial services firms will lead the AI “appification” wave on their existing mobile applications. These apps are important touchpoints for consumers to pay bills, make transfers and check balances, or access support. Last year, several banks bypassed simple scripted chatbots and implemented cognitive AI platforms to help consumers transfer money, find a bank branch or connect to an agent.

This included SEB Bank in Sweden, who implemented a cognitive agent, under the name Aida, to handle queries from around 300 customers a day. Aida books meetings, finds nearby services, opens accounts and resets passwords. Accuracy in recognizing customer intent is 90% and customer satisfaction rates are high at 91%.

In 2019, banking apps will become even more conversational, focusing on convenience and flexibility. AI and cognitive agents will be the foundation of these apps, rather than add-ons or nice-to-have features. Consumers will converse with cognitive agents more fluidly by both voice and text messaging to ask questions, schedule branch meetings and receive tailored recommendations on financial services. With data, natural language and an understanding of industry regulations and processes, cognitive agents will be able to take actions for consumers as well as respond to follow-up questions.

Building consumer trust

That said, introducing conversational assistants into banking apps, just as with a new technology, is not a failproof way of improving customer experience. Successful implementations and a positive customer reaction towards the use of AI in banking will be established through increased levels of trust between banks and consumers. Banks must demonstrate that this technology will offer an enhanced CX, reduced wait times, the secure exchange of personal data and accurate answers.

When establishing the assistant’s capabilities, banks must consider what value to deliver to their customers and ensure that they don’t extend into the realm of being creepy or nagging. Using chatbots to advise consumers on incredibly personal topics such as spending habits, for example, is a risky path without first establishing confidence in it to truly deliver value. Starting with straightforward tasks, such as checking balances, unblocking cards or setting up direct debits, immediate value will be provided to customers while increasingly establishing trust.

Once that trust is established, banks can then go on to create and offer more dynamic and adaptable interfaces that use AI to highlight each consumer’s financial priorities, acting as personalised advisers helping consumers stay on track with budgets or savings goals.

We have seen the “appification” of AI starting to emerge at the tail end of last year in a few industries, yet we will see this quickly pick up speed and propagate across verticals in 2019. With applications quickly becoming the most popular banking channel, using predictive analytics, conversational interfaces and tailored consumer information will raise the bar on CX. Ultimately, this will improve customer communications, and make products and services truly stand out amongst their competitors.