Is the new generation of bots ready to replace client relationship managers? Or are Swiss banks not being aggressive enough about AI? In an interview with finews.com, Capco's Aniello Bove takes a deeper look.
The launch of Open AI's ChatGPT chatbot last November has made millions of people directly and viscerally aware of the latest advances in artificial intelligence.
Until now, AI tools were only in a position to read and write and they could not easily decipher context-sensitive content. That has now changed. Led by ChatGPT, this new generation of state-of-the-art tools is able to understand and respond to natural language queries.
Countless Advantages
The truth is that AI and machine learning have become enormously important for banking in recent years. One of their most frequent uses is in client service, as exemplified by the regular chatbots banks and insurers already use.
«When it comes to digital services, AI assistants can help improve client support and contact in the banking sector,», says Aniello Bove, a partner at global business and technology consultancy Capco.
They are able to classify external client queries more quickly, and conduct triage or support activities around the clock. Ultimately, that all leads to an improved client experience. Internally, chatbots are increasingly in a position to assist bank employees in advisory and support functions.
Intelligent Automation
Originally, chatbots helped with basic work processes such as managing FAQ queries, which helped to increase operating efficiencies. «Now we are increasingly seeing a trend towards intelligent automatization», Bove emphasizes.
Aniello Bove (Image: Capco)
The key interfaces in the client interaction process are being combined with bot tech that arranges and sorts everything intelligently and helps to better manage the overall process, which ultimately allows for more complex workflows to be automated.
Focus on Conversations
The actual dialogue between a client and the bank is increasingly the focus of all exchanges between banks and clients, the Capco expert explains. «What does the client want, what product is suitable, and how can I help?»
Bots are also becoming responsible to persuade so-called digital natives to choose specific banks in an increasingly digitalized finance sector. «We are talking about the younger generation that has grown up with mobile devices, the internet, and social media».
Familiar Communication
Younger people find chatbots easier to communicate with given that they are already familiar with messaging platforms such as WhatsApp. «Whether in text or voice, bots are becoming increasingly important to conversational banking», the Capco partner says, hinting at future developments and trends in digital and mobile banking.
But will the chatbot soon become a client advisor? «That development has already started», indicates Bove. In three to five years, digital bot advisors will be the reality for much of the daily banking activities of the younger generation.
A Hybrid Model
It is important that banks pursue a hybrid advisory model that encompasses both personal contact and digital channels. Bove also indicates that it is important for conservative private banks to increasingly look at digital bank assistants given they can't ignore the needs of younger clients.
Clients expect competent advice and prompt reaction times from banks. But questions related to retirement and investment, for example, can be complex and chatbots can be complementary to personal contact, Bove is convinced.
Specialist Support
«Bank employees don't have to help with all problems and tasks», he says. «Bots provide support and help increase employee productivity». They can also relieve many internal administrative burdens, Bove indicates.
Despite all the potential advantages, using bots also entails certain risks, particularly related to data and data privacy, Bove says.
«Dealing with all personal data securely in real-time together with all the available information from different sources is one of the biggest challenges.»
There are also questions related to liability when it comes to things like securities trading orders. These are all legally specified for personal advisors but much of this remains unclear with bots, which is one of the reasons many banks have been relatively restrained when it comes to using bots.
Swiss Banks Hesitant
«Public bots are relatively rare in Swiss banking and they are certainly not universally used for all services», observes Bove. Anglo-Saxon banks and most significant of all, Asian financial institutions, are far ahead of them.
«Chatbot technology is going to become increasingly pervasive at internationally active Swiss banks as a result of global competitive pressures,» Bove says. Anybody active in Asia is not going to be able to get by without using such solutions. According to him, Swiss banks should generally be more aggressive and innovative about using them.
Early Days
In the future, bots will be able to learn independently and recognize patterns by extrapolating information from large pools of data, Bove explains. As ChatGPT shows, the technology is becoming increasingly available, cheap, and easier to use.
«We are only at the start. AI still has a long way to go», Bove states, clearly convinced of the technology's potential.
