FINANCIAL SERVICES KAREN CONE: MICROSOFT According to a recent PwC report, artificial intelligence (AI) will play a substantial role in the reshaping of client engagement in financial services over the next decade. Smart businesses will develop new forms of virtual engagement capable of integrating themselves into customers’ lives. They will stick because they will be personal: informed by intelligence gathered from data about consumer behaviours, choices and volunteered preferences. This is something we explore further in the following pages, where we discover how AI is already proving transformative across both retail banking and insurance. Plus, there’s the usual mix of case studies and thought leadership from across our partner network. 58 FEATURE How AI can enhance the customer experience We explore how artificial intelligence could improve banks’ ability to personalise the customer experience and identify patterns in ways that humans can’t BY REBECCA LAMBERT hat makes a consumer choose one Upper Class. A separate app then measures their particular brand over another? Cost? reaction and collects data that Virgin can use to WConvenience? The overall customer refine its customer experience. experience? For over 20 years, airline operator Of course, Virgin is not the only company Virgin Atlantic has put its success down to its doing this kind of thing. Look into any indus- unswerving focus on providing the best possible try and you’ll see the most successful businesses customer experience. Ask a frequent flyer and focusing their efforts on continually improving loyalty programme member why they choose the customer experience. to fly with Virgin, and many highlight its atten- Some are more innovative than others. tion to detail, brand ethos, and general ability to Retailers have long been regarded as leading the make flying a pleasurable experience. It’s not just way when it comes to staying relevant and antic- about the cost of a seat. ipating their customers’ needs. Banks, on the Over the years, Virgin has introduced various other hand, have been accused of needing to do innovations to keep its customers excited about more. One report, The evolution of private bank- the flying experience it has to offer. In 2015, for ing and wealth management resulting from digiti- example, it worked with Microsoft to create an zation, published by Efma and Comarch in 2016, app called IDA (immersive digital adventure) says that banks need to be ‘Amazonified’ to stay that its sales team could use to give custom- in the game. “In other words, banks are advised ers a realistic view of what it’s like to travel in to consider using demographic, contextual and 59 www.technologyrecord.com FINANCIAL SERVICES VIEWPOINT A similar story in insurance Heloise Rossouw at Willis Towers Watson explains how insurers are also upping their efforts to become more customer centric As is the case in banking, expectations of customer try new things. A useful approach may be to identify experience and service in insurance are being shaped opportunities that can deliver pockets of value to the by the likes of online retailers who have taken attributes business, but with an ‘if you’re going to fail – fail fast’ such as ease of use, algorithms that can pre-empt mentality. This requires a culture of confidence where the customer needs, fast or real-time service, and management can act quickly – a situation facilitated by individual customer recognition to new levels. accurate real-time analytics and rapid monitoring. Distribution and customer service nirvana for insurers Until insurers fully address the back-office implications is therefore increasingly likely to involve an omnichannel and the delivery of real-time analytics, the benefits approach to customer connectivity, allowing customers of more customer-focused business models are likely to interact with insurers in a way that suits them. to fall short of expectations, no matter how great the The challenge for many insurers will be to organise their front-end proposition looks. existing capabilities differently to meet more customer- focused and cross-functional goals. Having done that, Heloise Rossouw is a senior consultant in the Insurance they will also need to be prepared to experiment and Management Consultancy at Willis Towers Watson 60 FEATURE behavioural data to learn more about those they we’re starting to see more and more experimenting cater to – and to provide services that truly reso- with this technology,” Hamblin says. “Applications nate with their audiences,” the report says. range from using robo-advisors to help answer Indeed, as customers get used to more person- common customer queries before reaching the call alised, engaging and seamless interactions and centre all the way through to running algorithms experiences in all aspect of their lives, so too that anticipate customer issues before they arise.” have they come to expect a similar level of ser- Monique Dahler, worldwide director of Financial vice from their financial services provider. Services and AI lead at Microsoft, says that finan- Chad Hamblin, global industry director of cial institutions see AI as a key enabler to accelerate Financial Services at Microsoft, says that most their transformation journey to a digital business. banks understand this, and are exploring how “Through AI, banks can provide innovative they can improve their ability to better engage customer experiences at any point in time with their customers. through any channel,” she says. “AI is a key drive “Today, every customer is a digital customer to realise cost and operational efficiency, better and this requires banks to not only digitise their risk management, and secure customer acquisi- services, but make their entire offering better tion and growth. aligned to customer needs,” he says. “They need “In its simplest form, it can automate manual to treat every interaction with the customer as tasks – such as generating reports or answering more of a conversation – one that is natural, common enquiries, freeing up staff to carry out intuitive and personal.” more value-added tasks. But it also has the poten- To achieve this, many banks are beginning to tial to transform entire business models and revo- explore developments around artificial intelli- lutionise more strategic functions such as financial gence (AI). “It’s high on their priority agenda and analysis, asset allocation and forecasting.” VIEWPOINT How to remain relevant with customers Paul Bowen at Avanade explains why banks are stepping up their AI developments The customer experience is becoming the single that is a bot framework for customer-facing activities, biggest challenge affecting banks. PSD2 across Europe predictive analytics via machine learning or intelligent and the open banking legislation in the UK are opening automation of back-office processes, are critical too. up banks’ most prized assets – their clients – to Many banks have already launched AI services. competitors. Bank of America has been developing a voice- and Banks have to find a way to make themselves the text-enabled chatbot, Erica, to help its clients improve financial services platform of choice for their clients. decision making. Capital One has launched Eno for This has to be through a combination of things: mobile phones, and Barclays Africa has launched a leveraging other institutions’ APIs to build single client chatbot which moves services to Twitter and Facebook views; a focus on their differentiators, notably trust; so clients can bank within their preferred social media and an increasingly fluid proposition with new offerings app. Many of these deployments remain relatively non- available in days rather than months. invasive, but indications are that all organisations are Today, customers want a personalised experience, actively looking to accelerate. Regulatory issues may whether that is seeing just the information they still make the more cautious delay and, of course, the want or getting better advice based on their specific legacy estate on which they sit may present challenges circumstances. AI is key to enabling these demands. to be overcome. As banks come under more pressure to reduce costs and improve regulatory compliance, the capabilities Paul Bowen is senior vice president and banking that AI can provide in workplace automation, whether executive leader at Avanade 61 www.technologyrecord.com Market leader in innovative risk scoring goes global AdviceRobo applies big behavioural data such as psychographics and machine learning technology to discover and monitor patterns that reduce credit risk. Our solutions, delivered via Microsoft Azure, include automated underwriting, thin file psychographic credit scoring and near real-time risk tracking. AdviceRobo is one of the 50 hottest fintech Banks and lenders across the region benefit with 20% increased acceptance firms in Europe, as rates, decreased risk levels of up to 38% and lower operational cost. chosen by some of the biggest names in the sector. www.advicerobo.com FEATURE To help banks on their journey towards adopt- understand the creditworthiness of applicants and Microsoft’s Bot ing and harnessing the power of AI, Microsoft has customers by using behavioural data and machine Framework helps developed the Microsoft Bot Framework, which learning. The company applies psychographics to create intelligent bots which interact provides everything needed to quickly build and scoring, financial and other behavioural data to with users naturally connect