This article first appeared in the Summer 2017 issue of The Record.
What makes a consumer choose one particular brand over another? Cost? Convenience? The overall customer experience? For over 20 years, airline operator Virgin Atlantic has put its success down to its unswerving focus on providing the best possible customer experience. Ask a frequent flyer and loyalty programme member why they choose to fly with Virgin, and many highlight its attention to detail, brand ethos, and general ability to make flying a pleasurable experience. It’s not just about the cost of a seat.
Over the years, Virgin has introduced various innovations to keep its customers excited about the flying experience it has to offer. In 2015, for example, it worked with Microsoft to create an app called IDA (immersive digital adventure) that its sales team could use to give customers a realistic view of what it’s like to travel in Upper Class. A separate app then measures their reaction and collects data that Virgin can use to refine its customer experience.
Of course, Virgin is not the only company doing this kind of thing. Look into any industry and you’ll see the most successful businesses focusing their efforts on continually improving the customer experience.
Some are more innovative than others. Retailers have long been regarded as leading the way when it comes to staying relevant and anticipating their customers’ needs. Banks, on the other hand, have been accused of needing to do more. One report, The evolution of private banking and wealth management resulting from digitization, published by Efma and Comarch in 2016, says that banks need to be ‘Amazonified’ to stay in the game. “In other words, banks are advised to consider using demographic, contextual and behavioural data to learn more about those they cater to – and to provide services that truly resonate with their audiences,” the report says.
Indeed, as customers get used to more personalised, engaging and seamless interactions and experiences in all aspect of their lives, so too have they come to expect a similar level of service from their financial services provider.
Chad Hamblin, global industry director of Financial Services at Microsoft, says that most banks understand this, and are exploring how they can improve their ability to better engage with their customers.
“Today, every customer is a digital customer and this requires banks to not only digitise their services, but make their entire offering better aligned to customer needs,” he says. “They need to treat every interaction with the customer as more of a conversation – one that is natural, intuitive and personal.”
To achieve this, many banks are beginning to explore developments around artificial intelligence (AI). “It’s high on their priority agenda and we’re starting to see more and more experimenting with this technology,” Hamblin says. “Applications range from using robo-advisors to help answer common customer queries before reaching the call centre all the way through to running algorithms that anticipate customer issues before they arise.”
Monique Dahler, worldwide director of Financial Services and AI lead at Microsoft, says that financial institutions see AI as a key enabler to accelerate their transformation journey to a digital business.
“Through AI, banks can provide innovative
customer experiences at any point in time through any channel,” she says. “AI is a key drive to realise cost and operational efficiency, better risk management, and secure customer acquisition and growth.
“In its simplest form, it can automate manual tasks – such as generating reports or answering common enquiries, freeing up staff to carry out more value-added tasks. But it also has the potential to transform entire business models and revolutionise more strategic functions such as financial analysis, asset allocation and forecasting.”
To help banks on their journey towards adopting and harnessing the power of AI, Microsoft has developed the Microsoft Bot Framework, which provides everything needed to quickly build and connect a bot to whatever channel and integrate with popular tools such as Skype and Office 365.
“This is not just about providing a product, though,” Dahler explains. “At Microsoft, we believe that the value of AI is not about getting a quick chat bot in place. Where we make a difference is that we help banks take advantage of our entire AI value chain or Cortana Intelligence Suite. We give them access to our entire product suite and connect them with industry experts, helping them to transform data into intelligent actions.”
For banks that are considering exploring the potential of AI but are put off by the time, effort and costs it could take – or think that the technology is still undeveloped – Microsoft also has a number of AI early adopter programmes. “For example, the Intelligent Bots EAP is a programme that delivers a customer or employee facing bot into pilot in a short timeframe – around five weeks,” Dahler explains. “We help them to create a solution and pilot it with real end users. It’s a great way of getting AI developments off the ground quickly.”
Understandably, as with most developments around AI, practical applications are still in their infancy. But there are solutions out there, delivered by Microsoft partners, that banks can take advantage of. For example, AdviceRobo has created a way for financial institutions to better understand the creditworthiness of applicants and customers by using behavioural data and machine learning. The company applies psychographics scoring, financial and other behavioural data to create richer insights that help lenders make the right credit decisions and better monitor risk.
And Blueprism has developed Robotic Process Automation, which enables business operations to be agile and cost effective through rapid automation of manual, rules-based, back-office administrative processes, reducing cost and improving accuracy by creating a digital workforce.
Hamblin says that for those banks who are willing to explore the potential of AI now, the possibilities are endless. “We’re in conversations with customers who are developing everything from robo-advisor capabilities – using AI as a vehicle to do low cost trading without human intervention or as a first line of communication with the customer – through to using AI and social capabilities as the canary in the mine to identify problems and issues before they progress and cause problems. This is just the beginning of the transformation of our industry.”