Should Your Financial Institution Consider Adding Artificial Intelligence (AI) Before Launching Digital Customer Service (Live chat, Co-browsing, Video Banking)?

Introduction to Digital Customer Service

Today, end consumers prefer to interact with friends, family, and colleagues over digital channels rather than traditional channels. These consumers expect to interact with businesses in the same way.

For all businesses, including financial institutions, being digital-first and catering to customer needs on the customer’s channel of preference is crucial. Incorporating Digital Customer Service offerings is one-way financial institutions are elevating their digital capabilities to serve customers better.

Digital Customer Service involves providing customer support through digital channels such as chat, email, text (SMS), social media, messaging apps, co-browsing, etc., using human agents predominantly (live-chat) supplemented with bots.

Different ways of launching Digital Customer Service

Several financial institutions are evaluating Digital Customer Service(DCS) offerings to ensure they cater to the digital needs of their customers. DCS can be launched broadly in two different ways for financial institutions:

Option 1: Launch DCS before implementing Artificial Intelligence

Option 2: Launch DCS after implementing Artificial Intelligence

Let us compare and contrast these two options of launching DCS and their respective impact on financial institutions.

Option 1: Launch DCS before implementing Artificial Intelligence

Some financial institutions are launching DCS before implementing AI on their system.

However, these financial institutions are facing several challenges with launching & experiencing success with the initiative.

A DCS initiative requires a financial institution to hire/allocate human agents as a prerequisite. A financial institution has to deal with several challenges related to budgeting, hiring, resource allocation & training to kick off the initiative.

Let us briefly take a closer look at these challenges from a financial institution’s perspective –

Resource Allocation & Budgeting-

• Lack of visibility with respect to how many resources are needed for the initiative due to the lack of clarity on customer adoption & customer interaction patterns (including types of questions asked by customers)
• DCS adoption varies with each financial institution, and there have been numerous instances where financial institutions’ bottom line has been impacted due to un-optimized expenses.

Due to rising customer queries on digital and call center channels, there is already a lack of bandwidth with respect to internal resources.

Hiring additional agents has been the way to go for FIs that implement DCS, and hiring comes with its own set of challenges.

Hiring Challenges For Call Center Agent Roles-

• People do not enjoy the repetitive nature of work and the high stress and work hours that come with it
• These roles have high attrition rates, so FIs need to hire continuously
• Costs associated with the position are always on the rise (In the last five years, Bank of America has raised the minimum hourly wage from $15 in 2017 to $22 in 2022 and plans to raise it further to $25 by 2025)

Training challenges –

• Training to ensure consistent responses across the board is tough, leading to inconsistent customer service and customer experience.
• Ramp time for new agents is anywhere between 6 to 8 weeks
• The time and resources needed to train & manage agents are high due to high attrition rates

Due to all these challenges, FIs offer inconsistent customer service, bear higher costs, and are operationally inefficient. They also hire more staff than required, leading to more bandwidth & cost inefficiencies.

Option 2: Launch DCS after implementing Artificial Intelligence

To overcome the challenges that DCS poses, financial institutions are following the strategy of launching a couple of highly impactful Artificial Intelligence-powered products, ‘Smart Discovery’ and the ‘AI-Powered Phone Banking,’ before continuing their DCS evaluation.

‘Smart Discovery’ is a product that acts as a concierge bot that helps prospects and customers find information about a financial institution’s products and services readily. This can be set up on any digital channel swiftly.

‘AI-Powered Phone Banking’ is a product where the AI is set up in the financial institution’s call center. It handles all the incoming calls a financial institution receives and helps automate most of these calls in a few weeks.

Both these products help a financial institution offer 24/7/365 customer support, improve operational efficiency and enhance customer experience.

How does this help overcome challenges in implementing a DCS?
Within 3 to 6 months of implementing these systems, a financial institution will have clear visibility into the following.

• The digital interaction patterns of your customers
• Clear visibility into the kind of questions customers are asking
• The times at which the questions are being asked

In addition, the icing on the cake is that the ‘AI-Powered Phone Banking’ product would already be handling many of these questions round-the-clock automatically. Doing so would have freed up several call center agents. Instead of hiring new agents, financial institutions can then leverage the agents who are freed up to handle a DCS system or any other high-impact work.

In the context of launching a DCS system, this setup will give a clear picture of

• How many staff can be reallocated or have to be hired
• The times the staff need to be active
• The kind of information and questions they need to be trained on

In most cases, launching these AI-powered products eliminates the need to hire new staff.

Case studies that prove launching DCS after implementing AI yields more success

Over 70+ financial institutions across the nation are leveraging interface.ai’s Smart Discovery & AI-Powered Phone Banking products as part of the initial phase in their digital transformation strategy. These products are leveraged as part of the initial phase of digital transformation strategy as they not only help financial institutions offer industry-leading customer support, improve operational efficiency and enhance customer experience, but they also help in ensuring other digital initiatives, such as the DCS, are successful.

Financial Institution 1 (HQ-San Antonio, Texas, Asset Size- $9.82B, Number of Customers-800,000)

Twelve months before launching their DCS system, this financial institution launched interface.ai’s ‘Smart Discovery’ product on their website & called it ‘Ava’. The objective of this launch was to deflect call center calls and to understand the customer interaction patterns, the type of questions asked and the times at which the questions were being asked, and the human effort required to manage the entire live-chat aspect of the DCS system.

Besides deflecting several thousand call center calls & saving thousands of dollars for the FI, ‘Ava’ provided the required data and insights, which allowed the FI to come up with an effective & efficient staffing strategy.

Through the data generated as an outcome of this initiative, the FI today just has two people managing the live chat for over a million customers. They added this staff only between 10 am and 2 pm CST.

With ‘Ava’, the FI managed questions from over a million customers with just two staff members.

Financial Institution 2 (HQ-Dallas, Texas, Asset Size-$1.08B, Number of Customers- 56,261)

Six months before evaluating DCS systems, this financial institution launched their AI-Powered Phone Banking product, branded as ‘Nick’ on their call center. ‘Nick’ was handling 100% of their incoming calls, drastically improved their service levels, and automated over 40% of their incoming calls. With this launch, the FI freed up four call center agents who they plan on repurposing to other initiatives, including DCS.

The FI was able to repurpose employees rather than going through the significant challenge of hiring and training agents with the help of AI-powered Phone Banking.

With many call center employees exploring other career alternatives because of the nature of the job, it has become challenging to hire, train and retain them.

Conclusion

To launch Digital Customer Service (DCS) initiatives, insight into customer and prospect interaction patterns is critical to building effective and efficient staffing strategies.

To gain these insights and ensure digital initiatives such as the ‘DCS’ are a success, financial institutions are leveraging interface.ai’s Smart Discovery and AI-Powered Phone Banking that provide these insights and vastly enhance operational efficiency and the customer experience of a financial institution.