Reimagine experiences in Retail Banking - AI goes mainstream?

Have you ever wondered how some of our traditional retail banking experiences seem very archaic leaving us dissatisfied with the whole engagement model? The banking apps if available still seem purely transactional with a minimal set of personalized services offered.

Fintech and other digital-commerce innovators are steadily disintermediating banks from crucial aspects of customer relationships, and large tech companies are incorporating payments along with lending capabilities to attract more users with an ever-broader range of services. 

Consumer shifts towards digital models of engagement in retail banking have significantly gained momentum and increased on an average by 35% since covid-19 hit us in 2020.

Artificial Intelligence (AI) which drives systems to simulate human intelligence has been instrumental in delivering significant impact in the following areas:

1. Personalization of customer experience (Revenue Boost)
2. Increased Automation/ Reduced error rates (Cost reduction)
3. Explore unrealized opportunities (New Revenue channels)

McKinsey's recent study on retail banking trends explored use of several AI themes across the spectrum improving customer experiences and back-office processes.

An AI-driven bank will offer superior experiences to their customers which are:

• intelligent (recommending actions, anticipating and automating key decisions or tasks),
• personalized (relevant, timely, and based on a detailed understanding of customers’ past behavior and context),
• omnichannel (seamless interaction with consistent experience through physical and online contexts across multiple devices) and that
• blend banking capabilities with relevant products and services beyond banking.

Exploring a retail customer journey through their daily interactions shown below can reveal several possibilities to explore the concepts

Reimagining customer engagement to be ubiquitous in their lives solving current and emerging needs while delivering intuitive omnichannel experiences is key to creating a new plateau of differentiation.

The traditional concept of building products and services around the bank's offerings as a product-centric view and pushing them to customers through product bundles and discounted pricing has to be relinquished in favor of a customer-centric view which starts with understanding individual customer needs and driving their engagement based on it.

Some examples of innovation driven by financial management tools that can be integrated into the banking eco-system :

• Empower App highlights duplicate transactions and high bills on credit card bills suggesting possible actions like reducing the number of subscriptions or negotiating for a better deal with bank fees or other retailers.
• Acorns helps set budgets and alerts customers at certain thresholds to stay on track with their spending limits per category (dining, shopping, etc) apart from analyzing past transactions on payment reminders.
• Wealthfront, a wealth management tool, proposes an investment plan to customers based on their goals and provides actionable path towards achieving that like investments to buy a home in 5 years, take an year off for travel, retire at 55, etc.
• Fintech Tally helps customers handle with multiple credit card payments helping them decide on which cards to pay first, how much to pay and when to pay based on their life events while optimizing their credit scores.

Would love to hear your experiences both receiving and delivering customer experiences in banking and how you see the future of retail banking evolve!

Source: https://www.mckinsey.com/industries/financial-services/our-insights/building-the-ai-bank-of-the-future

Sid Nandi is an entrepreneur, business transformation leader, coach, technology strategy & management consultant experienced in helping organizations, business and technology undergo digital transformation with agility delivering customer centric products and solutions.

?His venture (DT) provides management, strategy & delivery consulting specializing in digital transformations to help accelerate organizations transform their business, technology & operations in creating sustainable value in a digital world. He is passionate about connecting and collaborating with fervent transformation professionals from all industry verticals committed to building sustainable enterprises!.