What will make a retail bank successful in 2019 and beyond? The short answer– technical competency and a deep understanding of customers’ constantly evolving needs.
Retail banks have to compete with some of the best technology organizations in the world: Amazon, Google, Apple and Facebook in the U.S. and Tencent, Baidu and Alibaba in China. In addition, fintechs like PayPal, Zelle and Venmo are using digital technologies to deliver frictionless financial services at lower costs than traditional banks.
Success for retail banks in this competitive landscape will depend on their ability to respond to technology driven disruption, leverage customer insight and expand their use of advanced analytics to provide relevant, frictionless experiences that help today’s connected, tech-savvy customers better manage their finances and their daily lives.
Artificial Intelligence is one of the key technologies that will continue to dramatically change the retail banking experience. Many banks are already using AI in the form of digital personal assistants and chabots to remove friction from the customer experience and gain new customer insights.
Automated AI-powered customer service representatives gather and process customer data and respond to customer requests in record time. Banking apps integrated with AI features deliver information about services, offers and insights based on the customer’s preferences and behaviors. Through machine learning techniques, the chabots continuously improve their ability to serve customers in an accurate, personalized and timely manner. There is also exploration in the payment space about how AI can help detect fraud and prevent incidents
These examples are just a tip of the iceberg. Robots powered by AI, autonomous vehicles, delivery drones are also becoming part of our world and their impact will continue to grow – offering new challenges and opportunities for enterprises across all industries. Retail banks that embrace AI to deliver innovative, connected experiences will be able to attract new customers and build deeper customer loyalty with existing customers.
Embedded technologies are also impacting the kinds of experiences retail banks need to deliver to meet consumer expectations. Voice-based smart assistants are already becoming an integral part of our lives enabling us to order products, make dinner reservations, view movie times, set reminders, makes lists, change settings of home devices, etc. This list of Alexa commands you can make today shows how far we have already come.
In the article, With Real-Time Analytics, Alexa Will Soon Know You Better, Seeta Hariharan, GM and Group Head, TCS Digital Software & Solutions Group, describes how conversational assistants and voice-activated speakers like Alexa are delivering new levels consumer engagement. “They represent yet another layer of ease and intimacy laid overtop our digital networks. We simply talk, and the Internet listens and responds,” explains Hariharan. “Ubiquitous networks and advanced human-to-machine interfaces are essential to addressing the needs of the connected consumer. They’re the digital touchpoints that make e-commerce such a big deal. But deep understanding comes only from gathering and interpreting data from across our digital and physical worlds — connected consumer intelligence.”
Retail bankers see the writing on the wall. In the article, A voice-led future – Banking with “Alexa” and similar services become mainstream, Richard Hartung reports that “a majority of bankers agree that voice will be the most important channel for their business after mobile.” Voice-activated services are already becoming infused in our lives and successful retail banks will respond by using voice to offer new innovative, personalized experiences.
Virtual Reality (VR) and Augmented Reality (AR)
The success of Pokeman Go demonstrates the enthusiasm people have for augmented reality. Savvy retail banks who understand this will look for new ways to incorporate technologies like VR and AR to transform the customer experience.
Some banks are already experimenting with VR and AR.
- GTE Financial, one of the largest credit unions in Florida, launched GTE 3D in 2015. GTE 3D is a virtual world that allows users to create an avatar and explore GTE products and services like home and auto loans, investments, insurance and financial information within a virtual financial center. Visitors can shate3 with GTE virtual advocates who can respond to questions, open accounts, apply for loans and download content from the library.
- The Commonwealth Bank of Australia and Halifax in the UK offer a ‘home finder’ app that uses AR technology to let customers view and see data on houses for sale as they pass by them.
- The National Bank of Oman uses AR to help customers find their nearest branch or ATM and locate offers and deals when walking into a shopping mall or down the street anywhere in Oman.
The kinds of engaging, immersive experiences banks can offer are exciting to consider as AR and VR become more functional and affordable. Through augmented reality, customers could visit bank branches without leaving their home. While this kind of experience may appeal to many bank customers, it is ideal for people with health challenges and those living in remote areas where traveling to a bank branch is difficult and inconvenient.
Imperatives for Success
Disruption is inevitable and technology is the driving force. How retail banks respond will determine if they thrive or fail. Successful banks will:
- Embrace new technologies such as AI, voice-activated services, AR and VR and whatever comes next to build deeper customer engagement.
- Collect and analyze data across all digital and physical touchpoints for the connected consumer intelligence needed to understand and respond to customers’ constantly evolving expectations.
- Leverage connected consumer intelligence to eliminate friction from the customer journey and deliver relevant, personalized experiences that help connected consumers better manage their finances and make their lives better.