White Paper. Can Virtual Assistance Become a Proxy for Human Interaction in Banking?

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1 White Paper Can Virtual Assistance Become a Proxy for Human Interaction in Banking?

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3 Can Virtual Assistance Become a Proxy for Human Interaction in Banking? EXECUTIVE SUMMARY Since the start of the previous decade, development in technology, predominantly in communication, has completely transformed the way banks interact with their customers. Technology is improving the ways in which impersonal services can complement or replace the human element in customer interaction, and banks surely are part of this changing ecosystem. Virtual Agent Solutions (VAS) is a program designed to automate the process of delivering answers to customer questions posed across a variety of interaction channels. It can interactively guide users through a personalized conversation and respond quickly and consistently to online customer service needs. Currently, VAS is supported by Artificial Intelligence (AI) and Natural Language Processing (NLP) technologies which help agents communicate, understand consumer requests, and provide solutions for them in the virtual platform. With the growing trend towards self-service, banks are facing the challenge of keeping consumers satisfied in their chosen channel. Intelligent virtual assistants can help banks deliver on this front by letting customers handle multiple tasks such as reviewing account information, transferring funds, paying bills, and applying for loans. Though advantages of using virtual assistants can compel banks to move away from manpower-based call centers, the risk of losing customers who are risk averse and find trust and comfort in human interaction for money related transactions will surely delay the full transformation of customer care from human to machine. CUSTOMERS WANT BANKS TO INCORPORATE PERSONAL ASPECT IN THEIR DIGITAL OFFERINGS A survey by YouGov, an internet-based market research firm, reveals that ~60% of consumers consider online banking the most valuable factor in their relationship with their bank; ranking it higher in importance than trustworthiness and return on money. The research also found that though banks typically offer only functional services through digital channels, Customers prefer a two-way conversational interaction over a one-way interaction with technology. around 50% of customers want them to incorporate more personalized customer service and tailored advice into these services too. Catering to the growing demand for self-service via digital channels without compromising customer service is the challenge for banks. A CONCIERGE STYLE DIGITAL BANKING IS THE NEED OF THE HOUR With the growing penetration of smartphones and tablets banks are responding effectively by offering more communication channels to meet customer demand. Today s technology-savvy customers want not only immediate and direct control of their money but also a high level of customer service. So, as with the physical branch, the bank s digital address also requires a concierge that is available 24/7. In a nutshell, banking customers want swift, safe, accurate, round-the-clock and, above all, easy access to their accounts. Percentage of Virtual Assistant Users by Age Also, Gen Z and Millennials expect to get all information and want to conduct all their banking transactions and interactions on their smartphones. As such, a mobile banking app should not be seen as a secondary interaction channel, but rather as the primary method of interacting with the younger generation consumers. Not surprisingly, the way the younger generation banks on smartphones significantly varies from the way the comparatively older generation does. A survey conducted by Research Now, an online sampling and data collection company, suggests a direct correlation between age and speech-enabled virtual assistant use. 3

4 Sutherland Global Services Customers Expectations from Banking Experience Average cost per interaction (US$) Source: Sutherland Research Although many banks have invested in mobile apps, these apps often fall short of consumer expectations, particularly those of the younger generation. Virtual assistants can bridge this expectations gap by transforming the mobile app experience with an alternative and more convenient way of interacting with the app. agent creates ~$7 million in cost savings. Thus, just by using virtual agents, banks can reduce costs and ultimately increase profits, a reason to cheer for an industry facing depressed revenue growth. IMPACT ANALYSIS BANKS PREFER COST CUTTING IN A CUSTOMER- CENTRIC METHOD With intelligent virtual assistants, banks could reduce the number of inbound calls while simultaneously improving customer satisfaction. With reduction in the number of inbound calls, call waiting time will also improve. This improvement will indirectly benefit customers who still prefer the traditional way of calling contact centers for query resolution. According to industry experts, use of voice-recognition technology can bring down the number of customer calls to about half. Using virtual assistance to cut the number of calls will result in reduction in the number of call centers and thereby in customer support staff, translating into savings of around a dozen billion dollars for the financial services industry. Data released by a leading U.S. bank suggests significant savings in the cost of interaction when a customer asks his/her question directly on the bank s website or another online channel compared to when a customer makes a call to a contact center. Every 1 million chats with a virtual Consumers say that a positive experience with a company s mobile app makes them more likely to continue doing business with the company. Source: Sutherland Research According to Sutherland Analysis, a US mid-size bank with about 10Mn retail customers can save close to US$1Bn, over the period of five years by incorporating virtual assistance as an interaction channel for certain categories of incidents. INVOLVEMENT OF HUMANS IN CUSTOMER SERVICE IS STILL ESSENTIAL Since inception, banking as an industry has thrived on the trust of its customers. The human element is the key to winning customer trust; especially in relationships where money is involved. 4

5 Can Virtual Assistance Become a Proxy for Human Interaction in Banking? There is no denying that virtual assistants can perform functions of a human in a faster, better, and cheaper way; but that these assistants replace the human element entirely is debatable. A common criticism of virtual assistants is that they eliminate human interaction and provide a cold, robot-like experience. Virtual agents do not have the capability to express empathic emotions toward users while dialoguing. Expressing emotions can increase satisfaction for a customer or lower his/her irritation when he/she is annoyed. A human-machine interaction will always fall short in communicating emotions. The below examples further illustrate the emotional disconnect that a customer might face while communicating with a virtual assistant. As great as your technology may be, it doesn t always work for everyone. There should always be a fall-back option to get to a human being. Shep Hyken, Customer Service Expert VIRTUAL ASSISTANCE DEPLOYMENT IN BANKING Testimonials This is a continuation of our journey to deliver meaningful advice to our members on digital platforms. And it reinforces our commitment to finding innovative and distinctive ways to make our members lives easier. Through this experience, we expect to learn how intelligent assistants can help service members who may not know exactly where or how to start the daunting transition process. Shon Manasco, EVP of Member Experience, USAA Bank We searched the market and decided that the Virtual Assistant was the best tool to help us improve the customer experience. It feels like we re getting an insight into the people, not the clicks. Head of Digital User Experience, TSB A customer calls a contact center to inform about a fraudulent transaction on his credit card. Instead of pacifying the customer, the virtual assistant may start conversing with him in a standard programmed manner which might further annoy the customer. Validation process can be affected if a customer is not able to produce the exact credential (e.g. flat no., street no.) matching the banking database. However, in case of a manual intervention, guidance or a hint can be used to resolve the issue According to industry experts, customer experience is not about only automation. Being familiarized with automation does not mean customers always prefer it. A balance between a user-friendly technology and the human element is the key to a successful customer interaction. With virtual assistant, we found a full service, self-help solution that could answer customer questions around the clock, provide the ability for our agents to focus on higher end tasks, and lower our operational costs without sacrificing quality. Moreover, unlike other vendors, we could program our virtual assistant to intelligently talk to our customers in Dutch using natural language. Sabine Struijk, Client Contact Manager, NIBC Direct Some of the key global banks that have implemented virtual assistance include: Also, cross-selling is the new normal for call centers. If virtual assistants are designed just to resolve customer queries, banks will have to bear a huge opportunity cost of cross-selling. 5

6 CONCLUSION Delighting customers is increasingly important in today s challenging business of banking. Banks of all types and sizes are looking for effective and cost-efficient ways to serve customers. If virtual assistants are used selectively, they can play a useful and cost-effective CRM role for banks. In the future banking however, virtual assistants will not completely take over contact centers, which will always have a place for human interaction. Moreover, the human interface will only increase with the degree of criticality of the problem. But with increasing intelligence of virtual assistants, days of all human call centers are surely numbered. Copyright Sutherland Global Services Sutherland Global Services 1160 Pittsford-Victor Road Pittsford, NY Produced in the United States of America May 2015 This document is current as of the initial date of publication and may be changed by SGS at any time. Not all offerings are available in every country in which SGS operates About Sutherland Global Services Established in 1986, Sutherland Global Services is a global BPO and technology-enabled services company offering an integrated set of backoffice and customer facing front-office services that support the entire customer lifecycle. It is one of the largest, independent BPO companies in the world serving marquee clients in major industry verticals. Headquartered in Rochester, New York, United States, Sutherland employs over 36,000 professionals and has nearly 60 global delivery centers in the United States, Australia, Brazil, Bulgaria, Canada, China, Colombia, Egypt, Estonia, India, Jamaica, Malaysia, Mexico, Morocco, the Philippines, Slovakia, Sweden, the United Arab Emirates, and the United Kingdom. For more information, visit Please recycle. 6