• Lexie Bryson, Digital Transformation Director at Ciklum


• 30.11.2021 02:00 pm
#Banks #Money

According to Yolt, one in ten UK adults anticipate having to borrow money to cover essential costs and 17% of people - a staggering 8.7m - are financially stretched.

Banks will be key to the financial recovery of the households and businesses rocked by Covid-19. But can they carry the weight of the public’s financial worries? In this article, Lexie Bryson, digital transformation director at Ciklum, answers this very question. 

The importance of investing in tech-driven solutions

The good news is, a Bank of England report released in July suggested that banks are emerging from the pandemic ‘resilient’ - in other words, ready to support those consumers struggling financially.

But the reality is, if banks are to withstand the nation’s demands in the long run (whilst competing with the fast-moving, currently booming fintech giants), they have to invest in tech driven solutions now. 

Think of it this way - tech can support banks, so that banks can support the public.

So how can banks up their tech game and help the nation in the post-pandemic world?

1. Using data & analytics to provide the all-important personal touch

Financial companies are not short of data - and there are so many advantages for banks in leveraging it; swifter lending decisions, more accurate risk exposure limits for customers, tailoring offers to individuals and suggesting relevant products to whole markets. 

For those customers requiring loan products, payment holidays and credit cards, data can help banks to better understand customers and their preferences and habits. This information can then be used to build better, more intelligent methods of serving and retaining that particular cohort - in a way that also protects the banks themselves from great risk. 

It’s worth noting here too, that businesses need to be transparent about their use of customer data - an incredibly powerful tool - in order to further foster trust and loyalty.

2. AI & customised loans

One of the old age problems banks face lies in predicting the level of debt affordable for each customer - a challenge that has become even tougher in the unstable economic situation. 

AI systems trained on credit decision data can help banks make the best decisions for both consumers and the business - helping to prevent customers from taking on unaffordable loan products.  

But AI is only as good as the data that feeds it - going back to the first point - data is king. The right training and testing is vital, as AI systems can be fed on biased credit decision data that ultimately prevents groups of customers from accessing certain financial products. 

3. AI, Machine learning (ML) and Robotic Process Automation (RPA) to help with customer demands

With chatbots, customers can get quick answers to their queries. Machine learning can be trained to identify which of those queries can be swiftly solved with RPA, and which require support from an employee. RPA can further assist with processing repetitive tasks such as customer onboarding and account opening.

Conversational AI harnesses Natural language processing (NLP) and ML to understand the intent of customers, predict what they might want, and even predict and determine the mood of a customer. 

But it’s worth saying the benefits go beyond improved customer experience - the application of these technologies can also improve retention, increase product sales and drive top line growth.

4. Improving customer experience with predictive algorithms

Historical data can be used to predict future events and trends - benefiting both the bank and the customer. For example, predictive analytics helps banks to identify and segregate ‘risky’ customers from risk-free customers - and target specific, affordable products appropriately. 

Algorithms can also improve the customer experience by offering budgeting support - helping people to avoid late overdraft payments and other penalties - an important feature for those customers experiencing financial worries. 

Technology is (just) an enabler

Cloud operations, blockchain, augmented reality (think virtual digital bank branches and digital wallets) - we could carry on with tech examples that improve customer experience and increase operational efficiencies. 

But this should not come at the cost of the all-important human touch. Tech should act as an enabler, promoting meaningful relationships and interactions rather than replacing them. There must always be the option to speak to a human - particularly given the reality of financial vulnerability across society. By striking a balance between an empathetic emotional approach and technology-led innovation, banks can deliver a sustainable and profitable customer experience that makes lives better.