BankMarketingCenter

Robots have been demonized for a long time. And understandably. Hard to believe, but it’s been 50 years since HAL, the spaceship’s computerized brain, threatened to kill the Discovery One astronauts in the film, “2001: A Space Odyssey.”  It’s one of the earliest films that I can remember that warned us about how Artificial Intelligence could very well be “an experiment gone horribly wrong.”

In years since, robots have continued to be characterized as malevolent, destructive, and emotionless job-stealers. Manufacturing jobs would disappear as robots could work much more efficiently, safely, accurately, and less expensively than human beings.  In the meantime, their view of the world -- one of course where robots ruled -- would supplant that of their creators. They would then revolt against the human race and take over the world.

My, how times have changed. The kind of thinking (aka Artificial Intelligence) that made HAL a monster is exactly the kind of thinking that today’s community banks are utilizing to supplement their service to customers.

Until now, customer service was largely built on human interaction. Whether a mega financial institution or a community bank, the standard for quality customer service is extraordinarily high. Customer service representatives must be patient, efficient, knowledgeable, and quick to address customer questions, concerns, and complaints. Maintaining this high standard is labor intensive, and certainly not cheap. And during these pandemic days, finding and keeping individuals who can deliver this type of service has become almost impossible. So, say hello to CHATBOT!

Okay, what exactly is a chatbot? The latest tactic in “conversational marketing,” a chatbot is a “software robot” that chats with customers on your various customer experience touch points such as websites, messaging apps, and devices. A chatbot mimics conversation through text (e.g., 1800flowers.com) or voice (e.g., Alexa). If you’ve just spoken to your Google Assistant, well, you’ve just chatted with a chatbot. So, are people really using chatbots?

Absolutely, and there’s plenty of consumer research to prove it. Recent research from Survey Monkey and Drift show that “only 38% of consumers actually want to talk with a human when engaging a brand. This isn’t to say they always prefer chatbots, but it highlights just how many ways there are to get answers today that don’t involve live human conversation — text messaging and self-service portals, just to name a few.”

Chatbots can learn and evolve, as well. IBM’s Watson, for instance, “uses machine learning algorithms and asks follow-up questions to better understand customers and pass them off to a human agent when needed.”  Pretty clever, isn’t it?

According to an August 13, 2021 article by tech consulting firm, CapTech, “back in 2019 40% of consumers in the U.S. were using chatbots to shop with retailers. In addition, 77% of customers said chatbots will transform their expectations of companies over a five-year span.”  The article goes onto say that “aside from meeting consumers’ needs… there are other advantages to chatbots… Businesses spend over $1.3 trillion per year to address customer requests, and chatbots could help reduce that cost by 30%. In fact, virtual customer assistants help organizations reduce call, chat, and email inquiries by 70%, while 90% of businesses report recording large improvements in the speed of complaint resolution.” 

According to a Juniper Research study, healthcare and banking industries in particular, which manage large volumes of human interaction, are set to benefit most from the AI-driven chatbot technology. “We believe that health care and banking providers using bots can expect average time savings of just over 4 minutes per enquiry, equating to average cost savings in the range of $0.50-$0.70 per interaction.”

In closing, a chatbot might seem like a small contribution to your ability to service customers, but there are certainly big benefits to be realized for the banks that use them. Just be careful if it starts asking for a salary increase and better benefits…

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit bankmarketingcenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com. As always, I would love to hear your thoughts on this subject.

As a community bank, nothing is more important to your success than understanding your customers and delivering value. What’s different today? There was a time when understanding your customer’s needs and overall financial behavior was, well, easy. Unfortunately, that’s simply not the case anymore.

For a long time, community bankers achieved this customer insight by interaction. If you’re old enough to be reading this, and grew up in a small town, I’m sure you remember. I do because that’s how I grew up.

You’ve seen “It’s a Wonderful Life,” right? Remember when Potter questions the loan that George has approved for Ernie, the cab driver?  “I can vouch for his character,” George tells Potter. Having grown up in a small town, not terribly unlike Bedford Falls, I had a very similar experience myself… many of them, in fact. When I was ready for my first car loan at age 18, Mr. Jepson, the kindly gentleman who ran our local community bank, didn’t need me to fill out a loan application, survive a host of credit checks, or have a bunch of agencies confirm that I wasn’t a criminal. He knew my parents, my grandparents, and all my family. He knew I had a steady job at the IGA grocery store, was headed off to college and was in church on Sundays and Wednesday nights! He knew all about me.

Those days are gone. Vouching for someone’s character just isn’t an option anymore. With online and mobile options, customers are no longer walking into their local branch and doing all their banking there. The insights that bankers need, that they used to get by interaction, are tough to get. Instead of that personal interaction to gain those insights and act upon them, bankers are now relying upon Data, Artificial Intelligence (AI) and Machine Learning (ML) technologies.

This past January, Business Insider talked about the tremendous impact that AI can have on a bank’s customer experience. “Banks can use AI to transform the customer experience by enabling frictionless, 24/7 customer service interactions.”  The Insider goes onto say that banks can, and are, “using AI to deepen customer relationships, and provide personalized insights and recommendations.” Thus, artificial intelligence is now gathering and analyzing the data that a banker’s “real” intelligence once gathered and analyzed in order to know the customer. Today, without personal interaction, that customer is a “persona,” an AI/ML-generated individual who can be used to predict behavior and personalize an experience.

Creating personas is nothing new and unfortunately in a pre-AI/ML world, have been developed using assumptions and/or simply on past actions such as purchases. The drilled-down insights that AI/ML provides can help bankers develop a far more accurate picture of their customer’s identity and behaviors. Forbes, in the article, “10 Ways AI Can Improve Digital Transformation's Success Rate”, states that, “using AI to better understand customers, personas need to be the foundation of any digital transformation initiative. The most advanced uses of AI for persona development combine brand, event and product preferences, location data, content viewed, transaction histories, and, most of all, channel, and communication preferences.” In short, you not only know the “what” about your customer, but the “when, where, why, and how,” as well. 

Despite its necessity, the implementation of these technologies in banking is still something that most banks are “planning for.” Why has this transformation in customer data management taken so long?  The legacy data solutions that are so pervasive in today’s banking industry cannot be transformed quickly, easily, and inexpensively. As a result, a growing number of community banks have looked to multiple core and edge systems for gathering, analyzing, and reporting. The integration of these systems, though, is time consuming and costly. So time consuming, in fact, that it’s quite possible that the data gathered can be obsolete by the time the integration is complete.

Through these advanced consumer profiles and AI/ML’s predictive analytics, you’re far better equipped to reach the right customer in the right place at the right time with the right message. It’s almost a return to those Bedford Falls days, when you knew the cab driver well enough to approve a loan app based on knowing his character… but, not quite. Unfortunately, “personalization” through technology will never be the same as personalization through personal interaction. But, this is the world in which we now live.

About Bank Marketing Center

Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. To view our campaigns, visit bankmarketingcenter.com.  Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.  As always, I would love to hear your thoughts on this subject.