For decades, banks designed their operational strategy to suit their priorities and ease of functioning. With limited choices available to them, customers existed on the periphery of this approach and rarely played a role in deciding how the bank worked. But the emergence of fintechs and entry of technology giants into the BFSI sector put the customer at the heart of every banking transaction. With technology providing greater insights into customer behaviour and persona, these new age banking entities changed the name of the game by basing their offerings on the customer’s perspective and providing a new improved experience. At this critical juncture, banks must focus on revamping the way they work to anticipate and exceed customer expectations.
What is Intuitive Banking?
According to a recent study, 54% of users expect their bank to be “intuitive” when it comes to offering services, 53% demand proactive “intelligence” from their bank, and 52% require customized recommendations of products and services. Intuitive banking refers to the organization’s ability to offer a highly personalized product or service to the customer, sometimes even before they realize they need it. It deduces even unstated customer needs from their data to proactively offer highly personalized service. As hyper personalization in banking drives better relationship management, financial advice, customer loyalty and retention, bank branches will evolve from being mere centers of transaction to becoming centers for new customer experience.
Building the Intuitive Tech Foundation
A bank’s biggest asset is the huge volume of customer data it has access to. Now is the time to unleash the power of Artificial Intelligence to analyze all data across departments and deliver contextual, intuitive, and hyper personalized service and product recommendations in real time. In India, SBI uses an AI-powered chat assistant that handles almost 10,000 queries per second or 864 million queries per day. ICICI Bank launched its AI Chatbot iPal in 2018 and since then it has interacted with more than 3 million customers. Natural Language Processing is evolving at an unprecedented pace and will drive advanced voice-based banking experiences for customers. Voice based banking services have already been tried in many banks like OCBC Bank, Singapore. But the use of NLP along with big data technologies will pave the way for more intuitive offerings. Virtual Reality (VR) and Augmented Reality (AR) will also play a key role in the new age intuitive banking experience. AI and AR powered chatbots and robot advisors are already in use. For example, the Santander Bank in Madrid introduced autonomous guide robots to guide customers through their visitor center way back in 2010. As the technologies evolve further, the sector will see more innovative technology powered use cases emerging.
Of course, even as banks move to leverage emerging technologies to improve intuitive services, they must not forget their older less digitally savvy customer base. Intuitive solutioning must include this valuable customer base by catering to their specific needs. Intuitive, easy to use mobile apps and digital touchpoints with step by step instructions, checks and corrective measures are a must. Banks across the world are already implementing provisions to cover the cost if the intuitive product fails to deliver the desired outcome. For example, Digit has developed a range of features that prevent its automated savings tool from causing an overdraft and the bank also has a mechanism in place to reimburse fees if this does happen.
Banks need a platform that can analyse huge volumes of data, including insights generated from previous customer interactions, real time requests, and large volumes of transaction information from across the financial ecosystem. Legacy infrastructure cannot cope with these new requirements. Complex banking infrastructure, data privacy concerns, and stringent regulations make complete digital transformation an expensive and time-consuming affair for most banks. Partnering with technology solution providers could help traditional banks come up with new and intuitive customer experiences. For example, Mashreq Bank partnered with Avaya and Koopid to introduce the first digital engagement banking chatbot in the Middle East. The chatbot can verify customers, complete transactions, and sign up for new services on the customer’s behalf.
An Evolving Business Ecosystem
Tighter integration of technology with banking could give rise to multiple new and innovative business models with banks becoming orchestrators of a new financial ecosystem. The open banking phenomenon is on the rise and is useful for helping customers get better products and services. Markets led by UK, EU and Singapore have already taken the lead by formulating their own open banking regulations and more countries are expected to follow suit.
As intuitive banking goes mainstream, the sector will likely see some specialized service providers coming together to deliver superlative customer experience. The first of these would be product designers who would integrate myriad technologies such as AI, ML, NLP, Social Network Analysis (SNA) to design new age intuitive products. The second would be infrastructure providers, like cloud service providers, who with their flexibility and economies of scale would play a huge part in the new banking reality. The third category would be the user experience experts, who could finetune the ecosystem orchestration for banks through digital channels of the customer’s choice. The most important specialist in this new banking system would be the middle layer solution providers, or the brains of the new age financial technology architecture. By helping banks modernize core systems they will enable the agility to create and roll out real-time contextual services and products. Together, these new entrants to the banking sector can drive the technology powered transformation it needs to implement truly intuitive solutions.
As intuitive banking becomes the norm, there are bound to be concerns about data privacy. And here is where the years of trust equity built by the sector will prove invaluable, particularly when bolstered with best in class data security solutions. As the industry evolves and transactions go digital, banks will increasingly play the role of a facilitator of financial services by using big data technologies to efficiently focus their resources, make real-time contextual and smart decisions and drive delightful customer experiences. The pace with which the banks adapt new technologies and move towards creating and offering customer-centric solutions and products would determine how soon the age of intuitive banking arrives.