The march of the bots for customer service: should bank CIOs slam shut or swing open the door?

The march of the customer service bots: should bank CIOs be afraid?

Fifteen years ago, banks were still embracing telephone banking and online payment systems were still in their infancy. At the time, the impact these systems had on the IT manager were minimal. The IT manager’s role might have been to ensure that call centres managed to peak efficiency, or to ensure that the right IT infrastructure was in place to handle the slow trickle of internet-based payments that was coming through.

Fast forward to 2016, and retail banks and insurers have come through the internet and mobile banking revolutions. Now they are confronted with pressure to consider even more advanced technological offerings, such as fully automated self-service machines, or automated advice from human-like avatars (or “bots”).

Financial services IT and business managers both know that this presents a new, yet strangely familiar challenge, but the question remains: how do they deal with it? Do they – like the financial institutions of yesteryear – hold the culture/budget/perceived priority line and resist investment in new technology. Or do they embrace change and deliver what their customers are demanding?

In 2011, Gartner predicted that 85% of customer relationships would be managed without human intervention. While it’s clear that we are still some way off that outcome, there’s no doubt that the appetite for these services is growing.

My company conducted a global survey across 56 different countries with Cognizant and Marketforce amongst 500 senior executives in the financial services and insurance industries. Among its findings was how a large number of financial services IT professionals (76% of respondents) stating smart phone “virtual assistants” such as Siri, are making customers more willing to engage with automated assistance and advice. Those organisations who are not able to provide these services in the coming years risk losing not only customers, but also any sort of competitive edge for all but a few segments.

However, it is important to balance the excitement about how AI and machine learning can affect customer engagement with how much customers also value personalisation. Bots are going to be a new channel but it’s also worth remembering that customers will want to switch between them and other channels when interacting with their bank or insurer.

It’s also important to consider how bots will play a role behind the scenes where bots run software processes that support and free up humans to better serve customers.
This field of technology is called robotic process automation where software automates software, autonomously making decisions about how software can support a customer service representative serving a customer. The emphasis here is on humanising robots rather than “robotising” humans, letting those humans who care most about outcomes make sure the end-to-end customer experience is continuously improved.

Essentially, this is giving customer service representatives a personal assistant which can actually do useful work and to align all other applications they need to use on their desktop. It will take data from one desktop application to another, reducing the complexity of time-consuming inter-application tasks and give that time back to users. That means customer service professionals spend less time struggling with multiple desktop technologies and more time serving customers.

Such a blending of robotics and CRM will happen alongside developments of customer self-service and automated customer support. However, we cannot get away from the fact that legacy systems remain a significant obstacle to making such a technological leap forward. Returning to what our survey revealed, 94 per cent of all respondents felt that their legacy systems constrained their organisation’s ability to meet customer demand for full self-service. Of this number, 72% said that legacy systems constrained them to either a “significant” or “massive” extent.

Whilst it is possibly the case that there is a certain amount of “learned helplessness” in play here (“it’s the legacy systems, stupid”) and some banks believe other challenges to be more pressing, the challenge for IT managers is generally clear. How can they make a solid business case for replacing this archaic infrastructure that is no longer agile or flexible enough to deal with the demands of a new digital generation?

The IT manager may seem like an unlikely saviour in this scenario, but it’s nonetheless one that an increasing number of financial services organisations are getting used to. One of the principal reasons for this is that today, more than ever, the role of the IT manager has changed.

Where once their sole responsibility might have been to install, maintain and repair, they must be now accept that their role has expanded, thanks largely to the demands made by increasingly digital-savvy customers. As a result, they have increasingly been moved out of the server room a more strategic position in which they fulfil customer needs as a de facto business partner.

It’s a role that requires IT managers to go above and beyond what you might traditionally associate with their role. Today, in addition to managing systems and processes, they must also diligently observe and interpret technological trends, customer behaviour and the solutions offered by competitors, and make recommendations based on how they can help their organisation to stay ahead.

The bottom line for any IT decision taker within the financial services industry is that holding on to history is no longer an option. Legacy systems can no longer be allowed to be a barrier to progress; a willingness to adopt, integrate and offer new technological services is pretty much a given, and rapid fulfilment of (ever changing) customer expectations is going to become a key battleground for these organisations in the coming years.

What’s clear is that those who are bold and decide to lead the technological charge will be those who benefit the most. Those who don’t will lose customers lose their competitive advantage and fall behind. One thing is clear – for retail banks and insurers, the time for holding the line has passed. Now, more than ever, it’s time to push the boundaries.

By Graham Lloyd, banking industry principal, Pegasystems