Not a day goes by without someone predicting that in less than a decade, automation, bots and AI will replace 50 percent of all banking jobs. And when we consider that the World Bank estimates approximately 23 percent of global employment is in the banking industry, that adds up to a lot of jobs.
Because the financial sector has quickly taken on tech advancements in the past, today’s talk about future job losses comes as no surprise. As banks adopt new technologies to become more efficient, secure and responsive to customer needs as well as compliant, the hope is that employee productivity and job satisfaction will also grow.
We may not like it, but most understand that technology spawns new types of jobs and makes others obsolete. Banking requires different approaches to the people-technology equation. It demands a renewed emphasis on helping the humans who will remain in banking provide exemplary service and sales, aided but not overridden by technology.
High tech is not high touch
True story: After recently logging into my banking app to check my balance and pay bills, I was confronted with the message: Mobile banking is not available to you. I first found this amusing. But after three login attempts I knew something was not right. Next I went to my laptop, only to discover the same message. Puzzled, I called my bank. An automated voice asked me questions. After seven minutes of answering them, the voice told me to call back during normal banking hours.
So during normal business hours the next day, I again answered the automated voice’s questions and was finally connected to a real human being: a female customer service representative who began to help with my account lockout. She stayed on the phone with me for more than 30 minutes. I waited as she spoke to the IT department and tech support team. She was professional and reassuring and while I still lacked access to my account, we determined the problem was likely caused by my internet provider. She told me to call back if I couldn’t resolve the problem.
At the tech team’s suggestion, I disconnected my internet service and waited a few minutes before re-booting. Voila! Account access fully restored.
Though my bank claims to spend $3 billion a year on new technology—and double that on maintenance and security—it took interaction from bank employees from several departments to fix my problem: live staff members, not AI technology spouting questions that waste time and frustrate customers in endless loops.
Insights from within
As a retail banking consultant in Europe, Asia and North America I’ve interviewed customer-facing staff at all levels. When we discuss ways to bridge the gap from service to selling, employees tell us they view customers’ financial situations as private. They perceive these interactions as highly confidential, personal and not easily discussed.
But engaging customers in meaningful dialogue about their current and future financial needs requires a special skillset that includes trust, confidence and empathy, in addition to appropriate knowledge levels on products and services. (In this BAI executive report, BAI chief marketing officer Holly Hughes talks about the importance of empathy in deepening customer relationships.)
In the interviews I conduct with bank employees on sales approach and methodology, I find little situational training on consultative and advisory selling. Most training focuses only on product knowledge.
Amidst the excitement about AI, employees are being marginalized when banks should invest more in up-skilling their capabilities. Bank management can greatly improve performance by focusing on AI integration with front line personnel who provide on-demand product and service information to customers quickly and efficiently. This integration of technology with problem-solving sales training can help mitigate complaints about poor experiences and reduce the number of unsatisfied customers.
Banks that excel at workforce engagement will win
In addition to price considerations, customers continue to judge their bank’s performance on their personal experiences with banking staff whether online, by phone or at a branch. Human interactions greatly influence customers’ perception of their banking experience and more importantly their loyalty to the bank. This year’s J.D. Power Retail Banking Satisfaction Study shows that while 28 percent of retail bank customers are now digital-only, this group is the least satisfied with their banking experience. The most satisfied customers use both digital platforms and branches.
On the other side of the divide, BAI Banking Outlook research shows that 41 percent of banks find it harder to build relationships in a digital era (up slightly from 2017) while 34 percent are undecided. Meanwhile, improving the in-person experience at branches remains a top-three priority for customers.
Gallup Polls indicate that approximately 65 percent of the workforce is either not engaged or actively disengaged with their jobs. Banks are no exception. As we witness higher turnover, increased job dissatisfaction and the threat of job loss, improving customer experience can pose a difficult challenge. These factors can increase employees’ resistance to change—including management’s attempts to integrate their skills with AI and other systems.
Many published articles peg the success rate of transformation projects at around 30 percent. So why undertake the risk when the failure rate is 70 percent? Knowing that timely, appropriate communication is critical to successful transformations, bank management must re-engage their employees now with open and compelling dialogue. To increase the odds that their next tech transformation doesn’t lose customers or employees, they must prepare staff long before implementation.
Can banks ‘think different’?
Consider Apple’s hugely profitable retail strategy. An integrated sign-up and queuing process efficiently directs people who need technical support to the Apple Store’s Genius Bar, where well-trained specialists answer questions and troubleshoot problems. Through face-to-face conversations, Apple learns how customers use their devices, understands and resolves problems and deepens relationships and loyalty. Apple created a fun place to access, play, buy and learn about Apple devices. Fascinatingly for a computer and mobile device company, people make the difference at Apple—not the technology.
Why can’t banking be fun and educational? If Apple can create a Genius Bar why can’t banks develop a “wealth bar” and engage customers in conversation about their financial aspirations? This is where high touch becomes a competitive advantage. But achieving Genius Bar-model service requires intensive, continuous staff training, which Apple heavily invests in.
Synchronize tech, value employees
Technology should be deployed wherever it can create efficiencies and assist in customer experience. It must sync with efforts to improve staff knowledge and sales methodology. It’s not only about what to sell but more importantly how to sell as well.
Bank management must differently approach how they’ll support their knowledge workers and deploy technology to align with customer’s expectations of bank staff. Banks that get this mix right will profit—both as responsive financial services providers and employers of choice. It’s an investment, to be sure: But who knows better how to invest than a bank?
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Peter Harlamon is a senior consultant and associate at Daniel Penn Associates. He has worked with clients in the U.S., Canada, United Kingdom, Australia, Indonesia and Singapore.