Financial Services
Technology's Role in Addressing CX Challenges: Leveraging Automation and AI in BFSI
14 Dec 2023
What
is the secret to winning new customers? While every business used to claim that
product or service quality was the key, that's no longer the primary driver
behind customers' choices today. Today, the critical factor is delivering an
exceptional customer experience (CX). When it comes to customer
recommendations, customers who have experienced stellar CX are more than eager
to spread the word and recommend the brand to their family and friends. So, it
is not just the businesses singing the praises of CX; it is customers
themselves.
This
emerging pattern can be noticed within the BFSI sector as well. Companies that
invest in customer experience trends have higher rates of recommendation,
greater wallet share, and are more likely to up-sell or cross-sell products and
services to existing customers. While the potential benefits of effective CX
management are clear, businesses in India face several challenges in delivering
exceptional customer experiences. Even though most businesses see CX as a key
driver of revenue growth, currently, only 17% of Indian businesses deliver
‘exceptional’ customer services.
In
addition to this, as more businesses transition to digital modes, the influence
of tech on customer service continues to grow. Technology is reinventing
everything related to customer service. Without the right technology,
delivering excellent customer service becomes that much more difficult. Let's
take a closer look at how technology can assist conventional BFSI firms in
addressing prominent customer service-related challenges.
- Automation
in Onboarding: Customer’s initial interaction with the business sets the stage
for the entire customer journey. If businesses fail to make a positive
impression here, customers will quickly abandon ship and seek services
elsewhere. In fact, research from Visa revealed that if the digital onboarding
process drags on for more than 20 minutes, a whopping 70% of customers will
give up on trying to open an account. Processing applications requires handling
lots of information: data capture when customers complete application forms,
data validation to confirm the customer has given the correct information,
passing the data between departments, and then inputting information into
banking systems. Doing all this manually takes time and leaves room for error.
The customer onboarding process can be hindered by incomplete or inaccurate
data, lack of effective communication between the bank and the customer and
disconnected systems slowing the process and leaving it open to errors.
Therefore,
automation can be introduced to carry out some redundant tasks that can take up
unnecessary manual bandwidth. RPA (Robotic Process Automation) tools can enable
process automation by mimicking repetitive executive activities. Activities
related to compliance management, document capture, identity verification, and
first-line customer service, among others, are more generalized and easily
manageable with RPA software.
Indian banks have been early adopters benefitting
from productivity gains, higher accuracy and cost-efficiency. A leading private
sector bank in India, back in 2017, automated multiple processes which led to a
substantial reduction in turnaround time on savings account opening, current
account opening, and various other processe
- Conversational
AI: Long waits on hold, repetitive enquires and endless transfers between
customer service agents - it's the kind of frustration that can drive anyone up
the wall. However, in comes Conversational AI. This cutting-edge technology is
like having a virtual chat partner who can talk to you just like a human can.
And the magic behind it? Natural Language Processing (NLP), the art of teaching
computers to understand and respond to human language. 65% of customer queries
follow a recurring pattern well-suited for resolution through conversational
banking chatbots. According to IBM, the incorporation of chatbots into the
customer support framework has the potential to generate substantial cost
savings of up to 30%. These savings are realized through the acceleration of
response times, enabling human agents to focus their expertise on more complex
queries. Each interaction with a chatbot results in a valuable time savings of
4 minutes for banking agents. While this may seem inconsequential individually,
it aggregates into a substantial financial gain, equating to up to INR 60 per
query. For banks, the profit advantage is clear as they would be able to meet
high volumes of support requests at reduced costs.
As
chatbots start to become a staple in customer service workflows, the next step
would be to integrate AI across all customer touchpoints to enable better
self-service, quicker resolution, and lower servicing costs. For instance, a
leading private sector bank’s virtual assistant is primed to analyse voice
queries to deliver instant solutions, point to appropriate areas, or escalate
to a support executive if the need arises.
- Hyper
personalization - Traditional BFSI firms are currently grappling with a dual
challenge. Firstly, their established business models are under threat from the
rise of fintechs. Secondly, customers have grown accustomed to a certain level
of usability, service quality, and personalization that traditional firms
struggle to deliver, posing a significant risk to their existing models. This
heightened customer expectation has been shaped, in part, by the exceptional CX
provided by retailers in the e-commerce sector.
Take
Amazon, for instance, which actively leverages customer data collected from
their shopping habits. If a customer, for example, adds various baby products
to their shopping cart, Amazon takes this as an opportunity to inquire about
the gender of the new-born, sweetening the deal with incentives like the chance
to win a Prime subscription. Similarly, Netflix dives deep into customers'
viewing behaviours, analysing even the minutiae of which parts of films they
re-watch or skip, all to offer spot-on film recommendations. This meticulous
approach has paid off handsomely for both Amazon and Netflix, with a
significant portion of their sales - 35% for Amazon and a whopping 60% for
Netflix – are attributed to hyper-personalized recommendations.
Customizing
products and services to precisely match customers' current needs can
significantly boost the likelihood of them making a purchase. This is a
valuable lesson that banks can readily embrace. Financial institutions, like
the Bank of Ireland, have taken note of this trend. The Bank of Ireland has
expressed its ambition to emulate the 'Netflix of Banking' model. To achieve
this, they are harnessing cutting-edge technologies such as data science,
artificial intelligence, machine learning, and analytics. Their ultimate goal
is to provide accurate recommendations for the right products and services,
aligning with the unique circumstances in their customers' lives.
In
the dynamic Indian market, BFSI firms cannot afford to overlook the
significance of customer experience management. As technology continues to
advance and customer expectations evolve, the future of CX management in India
holds several promising trends and opportunities. Investing in technology,
fostering a customer-centric culture, and staying abreast of emerging trends
will position businesses at the forefront of delivering exceptional customer
experiences in India's evolving landscape.
Author: Madhur Singhal, Managing Partner & CEO, Praxis Global Alliance