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Conversational banking: The interaction between humans and machines

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02 September 2021

Rapid digitalization and the unprecedented technological developments have been revolutionizing every industry, and the financial sector is no exception. Contrary to common belief, the pandemic didn’t set off an abrupt digitalization, as this process was already underway in the banking industry; it was, however, an important catalyst. 

For years now, many bank branches have been closing continuously as a result of the rapid development of digital channels, which caused a natural shift towards a more hybrid customer attention model. So what is at the root of this shift towards a new communication model between a bank and its clients? And more importantly, what are the benefits and challenges of this new way of interacting with customers?

The digital DNA of younger customers fosters the new hybrid model

The inclusion of the Gen Z, or centennials, in the labor market is one of the main levers of this new paradigm. The younger generation of new clients that are now using banking services, has always been used to getting immediate access to information, while also having in-person transactional relationships. Therefore, their demands are even more complex than usual: on the one hand, they expect procedures to be quick, simple and efficient, while they also prefer personal interaction for more delicate operations. To satisfy this complex customer behaviour, a hybrid relationship is the only viable solution and the ultimate way to conquer today’s diversified audience.

The second driver of this new relationship model is the recently accelerated digital transformation of banks. Clients who were used to managing their procedures with agents have had to immediately adapt to other, more automated solutions, because of the pandemic. It’s vital that banks reinforce these digital experiences and remove any obstacles customers might encounter in order to make the experience a positive one for all kinds of client profiles.

What are the current challenges of a hybrid customer service model? 

First of all, the quality of the interaction: it is not easy to achieve the same customer experience with a virtual assistant than with a human. Although the pandemic has helped accelerate digitalization, there were already certain operations that were carried out through digital channels that can’t be carried out the same anymore, and vice versa. For example, due to a change in regulations, customers can no longer make transfers from a branch office, they can only transfer money through the online banking platform. On the other hand, some banking entities in Spain have changed their mortgage payment policies unexpectedly, making it then necessary to go to a branch in order to proceed with this sort of process. The same goes for the telephone channel: clients can increase the maximum limit of cash withdrawal by telephone but to decrease the maximum, they must go to the bank and have it authorized by an agent.

A more immediate challenge was to manage the sudden massive increase in online requests during the confinement, which grew by 200% according to some financial entities. Attending this unexpected volume of demand has caused the collapse of contact centers, as agents were no longer able to assist every client. Therefore, virtual assistants went from an optional feature, to a necessary one. However, chatbots were already part of the client communication strategy because they help reduce costs and increase the customer experience by making it more human and empathetic.

Another important challenge was that, although consumers are generally more digital, there is still a big part of the population that resists embracing the digital world. Most people over 50 years old are used to managing their operations in person, and although alternatives such as chatbots can deliver a better, more complete customer experience, they can’t always provide the humanity and kindness these customers are expected to be treated with.

The benefits are worth it though

The greatest advantages of the human-bot interaction model lie in balancing what is necessary, while still taking into account what is preferred by the audience. Challenging and improving artificial intelligence in order to make it capable of assessing correctly the context, the urgency level, emotions, recognizing the differences in accents, separating the noise and understanding the demands of the client, is what causes a huge positive impact in customer experience. This new form of interaction not only creates a service that seems to be much more well adapted to the present conditions, which have provoked higher feelings of sensibility and irritability among the population, but it also supplies a more efficient working structure for the institutions, as they can optimize more efficiently their resources by identifying when it is truly necessary to provide with human capital help.

There are also benefits from an organization point of view. It is estimated that 60% of bank entities have the information in separate systems that do not communicate with each other, which means losing value and the opportunities that come with having a more global context. Even during a call with a customer center, more often than not, customers have to repeat information. The loss of data is among the biggest challenges at the organizational level.

During the podcast dedicated to the new relationship between humans and machines, our guests Beatriz Albert, Solutions Specific Knowledge Analyst, Digital & Retail Banking and Enrique Barambio, Engagement Manager at Chazz, together with Fabio Distaso, Head of Italy & Global Head of Conversational Banking at everis reached a few key conclusions:

  • The inclusion of the Gen Z, or centennials, in the labor market and the recently accelerated digital transformation of banks are two of the main levers of this new hybrid paradigm.
  • Integrating advanced technologies in customer data analysis, pattern-recognition systems, or omnichannel integration, are fostering a customer service experience of the future which combines seamlessly digital and human.
  • Some of the main challenges include not being able to achieve the same quality of interaction and the resistance of a large part of the population to the digital channel.
  • Improving artificial intelligence in order to make it capable of assessing correctly the situation, certain emotions, recognizing different accents and understanding the demands of the client, is what will make a huge positive impact in the customer experience.

Get more information and donwload our whitepaper Conversational banking: the 7 trends transforming the sector.

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