Artificial intelligence helps close the gap between traditional banking and fintech companies

This is the second blog in a series of three in which we talk about bridging human and digital experiences in finance. These blogs are based on our latest whitepaper. The first blog talks about improving the customers’ banking experience.

The last years have seen fintech and bigtech companies taking over parts of the payments industry that have traditionally been held by incumbent banks. The latter are not resting in defeat, though. Banks are catching up quickly with the newer fintech companies, with their superior user experience and internal design. Smart use of Artificial Intelligence (AI) and machine learning is helping them a ton - and will continue to do so in the future, says Aurélie Fon, Product Marketing Manager Digital Banking at Worldline. She explains in this blog how Artificial intelligence helps close the gap between traditional banking and fintech companies.

Change is sometimes coming slowly to traditional banks for a variety of reasons, but not because of a lack of trying. According to the Innovation in Retail Banking report 2019 76% of banks say that the use of advanced data and machine learning is the highest priority for them in their transformation to a digital-first organization. As an industry, only healthcare saw more AI companies founded between 2014 and 2019. Not only do banks recognize the need to fulfil an ever-growing customer demand for personalization, but in AI solutions, they also find a way to save time and money.

Millions of messages

One way banks see they can help their customers 24 hours a day and 7 days a week is through the use of chatbots. According to MobileMarketer, around 40% of millennials communicates with an automated bot on a daily basis. Juniper Research says a majority of people used voice search at some point last year and expects that by 2023, 8 billion voice assistants will be active worldwide. Two of these automated bots, as described in the cases below, are already running successfully for some banks, helping hundreds of thousands of customers navigate through their banking experiences. Many more will follow in the near future.

54% of people do their banking in the evening or during the weekends, which makes chatbots and their ‘always-on’ working capacity even more attractive. CaixaBank saw a 20% reduction in calls to their contact centre after the implementation of ‘Neo’, their chatbot that’s been used by at least 2.5 million customers. Neo has had more than 23 million conversations and customers received fitting answers on 85% of their questions, needing no further (human) assistance. An even bigger example can be found at Bank of America, where some ten million users corresponded with chatbot ‘Erica’. Erica has helped on more than 100 million client requests since its launch and knows the answer to more than 400,000 different financial questions. Other companies are taking notice: chatbots are an easy way to reduce costs while improving the customer experience. Before long, having a chatbot the norm for any financial organization.
 

Human or automated advice

Chatbots are perfectly capable of handling most ‘easy’ enquiries by customers. There’s no need for human intervention when someone’s logging on to check their balance or make simple transactions, for example. For more complicated requests, humans are still required in the conversation between banks and their customers, simply because people do not want to rely solely on computers to make decisions for them. 61% of users reject the idea of automated decision-making. However, this number drops to 45% when it comes to seeking advice. People do not object to computer advice, as long as there are experts at hand to have a final word with.

Bank of America is exploring where this ‘human versus machine’ limit lies with customers. Erica, the same chatbot serving millions of their customers, proactively sends insights about users’ spending and saving habits. On average, 150,000 people click on these insights to gain a perspective on their financial (wrong)doings.

With every conversation a customer has with a computer, the database of possible questions and answers grows. Machine learning makes the bots ‘smarter’, for lack of a better word. And with every successful interaction and every solid piece of advice, people’s trust in automated banking will grow. For now, the advantage younger fintech companies have on traditional banks, with regards to automation and digitalization, is nothing to sneeze at. Just know several institutions are working very hard (and successfully!) to make up ground, with more and more banks learning to embrace and successfully use AI to help improve the customer experience.