Australians are often credited with being early adopters of technology so it should come as no surprise that Australian banks are world leaders when it comes to embracing the move towards digital. In this article, we'll look Australia's early adopter status and then examine three technologies – or “fintech” - that are reshaping customer experience (CX) in Australian banking.
In 2016, South American telecommunications giant Telefonica released its Index on Digital Life, a comprehensive Global Index of Digital Life which measures how different countries and their citizens are progressing towards a digital economy.
According to the Index, Australia ranks third in the list of top 10 digital adopters, behind the United States and Canada. Australia beat out the likes of the United Kingdom, Germany and Japan to claim the third spot, with Australians rapidly embracing digital technology to work, communicate and enjoy their leisure time.
As Australians become increasingly comfortable with digital technology, the country's major banks have looked to accommodate the new needs of their customers. Earlier this year, banking industry software developer Avoka released its second annual State of Digital Sales in Banking Report, examining the rollout of digital services in 32 of the largest banks in Australia, North America and Europe. The top 10 included all of Australia's Big Four banks – the Commonwealth Bank, ANZ, the National Australia Bank and Westpac.
According to the report, Australia's Big Four are offering retail customers a wider range of account products online in comparison to banks from other countries. "Maybe it's an attitude of the Australian banks that they wanted to be early adopters," Avoka chief marketing officer Don Bergal told News Corp. "The market is a bit smaller, it's a bit less of a risk and maybe easier to implement and so they've been further ahead." So Australian banks are rising to the challenge of meeting expectations of their early adopter customers. What 3 technologies are currently reshaping CX in Australian banks?
Any important interaction with a bank begins with authentication of identity. In the past this has been done with passwords, which suffer from being weak, forgotten or causing friction for customers. This is where biometrics, metrics related to human characteristics, come in. The promise of biometrics is that they offer a quick and seamless way for customers to login, all while maintaining high levels of security.
An Avaya-commissioned report on how people in Australia, India, United Arab Emirates and the U.K. interact with banks, found that roughly third of customers prefer to use the mobile channel. The push towards mobile is another factor driving the rise in biometrics.
"The mobile apps are very intuitive, they've been done very, very well," Avaya's Peter Chidiac told Fifth Quadrant's Steve Nuttall in a recent podcast. "With fingerprint technology, I access my bank through my thumbprint...It feels far more secure in lots of ways."
Biometrics aren’t just about fingerprints. Chidiac and Nuttall also discussed how banks are beginning to look at the use of voice biometrics for the authentication process, an initiative which ANZ launched in early September. With voice biometrics, a customer can call a contact centre and speak naturally to an agent while simultaneously going through the authentication process. After that, the customer won't need to do anything else; no special phrases, no recitation of date and birth or passwords. By simply speaking, the system will authenticate within a few seconds.
According to Chidiac, voice biometrics are beneficial to financial institutions in multiple ways. From the CX side of things, there is less friction in the login process and for agents, it means dealing with customers which are more relaxed due to being able to skip a process. For the banks themselves, there is the added bonus being able to identify the voices of fraudsters. We can also see voice biometrics as adding value to the omni-channel experience. For example, if a customer were unable to resolve an issue via chat - which is increasingly becoming a preferred option - then picking up the phone and being able to call in without further authentication would be a huge improvement.
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2. Big data
Banks are in an excellent position when it comes to data accumulation. They know a lot about their customers and their spending habits, and are now able to leverage this knowledge through the use of big data and analytics.
Today, banks are always listening. Phone conversations and chat logs provide valuable data which can be used to teach chatbots or improve the overall CX of interacting with financial institutions. Chidiac gives the example of a customer who calls a contact centre with an issue, and is then moved into a co-browsing scenario by the agent. This whole process is also recorded and using that data, banks can identify recurring pain points and refine the customer journey.
"We’ve moved from a world where we used to talk about data capture and collection and storage and warehousing, to one where we're enabling data flows continuously," said Nuttall, commenting on the use of big data. In other words, advances in analytics have given banks the ability to unlock the potential of data that was previously stored to create deep insights into customer behaviour.
When it comes to CX in banking, the most important technology of all is AI. Although AI is still in its very early stages, Artificial Narrow Intelligence (ANI) - AI that's very good at a limited number of tasks – is having a huge impact on how banks are doing business. ANI chatbots can handle an increasing number of queries, but Chidiac and Nuttall agree that they are more likely to supplement rather than replace humans in the contact centre.
One of the findings from the Avaya-commissioned report was that there is a disconnect between customer satisfaction scores for digital banking and dealing with humans in contact centres. The reason for this is when companies focus on new technologies, it can lead to underinvestment in the human frontline. The result is the massive improvements in the digital realm outpacing the service customers receive from their human counterparts. In effect, the excellence of digital services has raised the bar to a level that is difficult for humans to match.
But rather than going extinct, the contact centre is evolving. AI will continue to improve and reach the point where it can handle almost all queries. At that point, agents can become highly trained specialists that are brought in as fail safes for when the AI is unable to deal with something.
Fifth Quadrant team members recently attended an event in which Dr Nicola Millard, Head of Customer Insight & Futures at BT Global Services Innovation, spoke about the use bots in the contact centre environment. Millard said that she often meets with large corporate clients who complain about call handling time increasing after the adoption of new chatbots. Millard's response is that this is actually a good thing, because it indicates that humans are dealing with the complex issues and leaving the simpler and more repetitive tasks to the bots.
More sophisticated AI known as "Robo-advisors" can provide algorithm-driven financial planning services to customers. Robo-advisors first emerged in 2008, and in the last nine years have become capable of handling complex tasks such as tax-loss harvesting, investment selection and retirement planning. Overall, robo-advisors offer investors an accessible, low-cost and efficient method for dealing with finances.
Millard, Chidiac and Nuttall all agree that the humans who work in banking will be enhanced not replaced by the machines. In the next few years, we will no doubt see continued breakthroughs in the technology changing CX in Australian financial institutions. Fintech is indeed an innovative and exciting space, and one to watch.
Photo Credit: Geoffrey Fairchild