Across all areas of business, banking included, consumers are demanding the ability to serve themselves. In fact, Gartner predicts that by 2020, consumer or business relationships will take place without human interaction 85 percent of the time.
The industry can already sense this shift, with S&P Global noting a record increase in branch closures just last year. And because consumers increasingly opt for channels that require less human interaction to research products and services, banks must drive quality conversations now more than ever. But how can they achieve this when consumers rarely visit a branch and still expect personalized service when they do?
Enter artificial intelligence (AI) and behavioral science, a powerful combo with benefits for both customers and banks alike. This mixture can deepen banks’ relationships with customers and ultimately drive growth.
Where to start?
Identifying a prospective customer’s needs among extensive potential product offerings, while cross referencing against innumerable product attribute permutations, remains an extremely complex task. It demands a highly refined customer-engagement process and support technologies, and it only succeeds when customers are elated with the results.
Instead, a common sales conversation today tends to look something like this: The banker pulls out a menu of services and unleashes every possible product combination, leaving the customer overwhelmed. The customer might leave with one or two products, as well as the feeling that the banker didn’t take the time to understand and address their concerns.
This initial sales conversation remains a major challenge among financial institutions: Retail customers generally walk out with an average of 1.3 products (1.8 for business customers) — but a whopping 70 percent of these products aren’t even the right fit for them, according to internal research based on client data.
So, how can bankers possibly select and adapt only the relevant product offerings that will most accurately meet a customer’s needs? By integrating AI into a relational sales process based on quality conversations.
In fact, according to McKinsey, adding AI to the banking sales and marketing process can lead to an estimated increase of 2.5 to 5.2 percent in revenue annually. Unlike humans, AI-enabled tools can crunch massive amounts of information and fill in gaps in real time, revealing unique insights about each customer to quickly and correctly guide them to the right product. Add in the human touch, and banks can apply these tools to truly connect with the customer and improve the overall banking experience.
So you have the data, now what?
While data is a good starting point, banks should turn to behavioral science — the study of why people behave the way they do —to drive the relational aspect of the process and zero in on the specific questions that apply to an individual customer.
Behavioral science provides insight into the way customers think, make decisions and interact with products and services that will later define how banks strategize their efforts for maximum effectiveness and efficiency.
Behavioral science identifies which emotions come into play when people make the financial choices they do — helping bankers understand the why behind customers’ decisions. Using behavioral economics, banks can implement techniques to guide consumers to wise financial choices. As the bank acquires more data, these strategies improve and customer relationships flourish
Banking leaders can use data and behavioral science together to develop customized conversation guides that follow the exact desired sales process outlined by the bank — fully engaging the customer and further deepening relationships based on consumer and market needs. Access to such an unprecedented stream of valuable data reveals to banks the potential profitability of their customers across all channels.
Benefits for both customers and banks
Combining AI and proprietary analytics engines, we can design and deploy highly dynamic digital dialogue guides for banks to use in engagement with customers. This truly benefits all parties involved by ensuring customers’ needs are met in a transparent, compliant and ethical manner.
Ultimately, the banker still runs the show, and revamping the branch to deploy customer-facing conversation guides on a tablet or smartphone allows bankers to present an intuitive and highly engaging interaction to the customer. While this process digitally empowers the customer in addressing their banking needs, bankers still support the face-to-face, personal interactions. The financial guidance allows customers to save funds that would otherwise be wasted on unneeded or inaccurate services. Together, all of these elements improve the customer’s overall banking experience.
Bankers can also reap the benefits. When the guided dialogue takes the lead, bankers can fully engage in interactive dialogue, working to establish rapport with the customer. Implementing this technology into a banker’s sales process can increase efficiencies by saving time with pre-filled customer dialogue, easily reviewing a customer’s account history, and reducing training; boost the banker’s productivity, confidence and mastery of products; and ultimately lead to the opening of more accounts.
Overhauling the sales process within the branch with customer-engagement technology can transform the bank, too. Facilitating these engagements through any PC or smartphone reduces the need for sales administration, freeing up employees’ time to devote to other areas. within the bank, like building new relationships or enhancing existing ones.
By tailoring the conversation to meet the specific needs of each individual within the bank’s customer base, branches can instead encourage intelligent dialogue that results in two to three more products adopted per customer, per line of business. Such software can also allow for sales compliance monitors, 24/7 performance tracking, “always on” tech support, and continuous improvements and updates.
The technology is out there. Time to embrace it.
We have more data — and opportunity — than ever to enhance our insights into customers’ behaviors and banking preferences. Understanding the needs, goals and desires of the individual customer solidifies a loyal relationship.
This new wave of digital banking reflects a shift in consumer expectations — proving that banks must better understand and support engagement with customers and relational conversations online. With AI and behavioral science–driven technologies in place to correctly guide the customer to the right products, banks will be able to increase product sales and customer satisfaction at the same time.
When analytics drive the relational conversations, everyone wins — especially the customer.