The latest developments in technology are changing the way businesses are interacting with new breeds of customer…
As the youngest millennials and centennials come of working age and become customers in their own right, the need for organisations to be able to communicate with them in a way they want and understand is increasingly important. This group of technology loving customers will continue to grow – being able to engage with them is critical.
So for an industry less known for its innovative adoption of new tech, how should financial services providers respond?
Engaging with a new breed of customer
Millennials and centennials expect immediate responses to service and product queries across the platforms native to them. They want personal, one-to-one customer service without having to talk on the phone or meet in person and they want it to be available round the clock.
In response to the overwhelming need for ‘right here, right now’ service, banks, building societies, insurers and mortgage brokers have embraced social media enabling access to customer support ‘out of hours’ for resolving problems on channels like Twitter, but proactive engagement on new products and services remains limited.
The use of messenger apps has become the hottest trend in social media and could hold the key to delivering for these groups. Applications like Facebook Messenger and WhatsApp are growing rapidly, and more people now use these more than social networks. In excess of 2 billion messages a month are sent between businesses and customers, meaning messaging apps, and specifically chatbots offer huge potential for providers to communicate with customers old and new.
Chatbots enable businesses to satisfy the twenty-four-hour customer without having to compromise. Unlike twitter there is no need to have people on hand to respond meaning out of hours services are available without the overheads of staff working twilight hours, also saving on costs. In short they facilitate the provision of instant service without the need for extending opening hours.
The evolution of AI for communications
So, what is a chatbot? Put simply it’s technology designed to enable a conversation through online messaging. It uses machine learning which means with every question asked and answered, the artificial intelligence (AI) program gets smarter.
A ‘bot’ has the ability to dig through enormous amounts of data very quickly, improving customer experience by sourcing the best and most helpful information faster than a service agent could.
Bots also overcome issues of human error: they can remember exactly where in the conversation they were from one day to the next so there’s no risk of information being forgotten or changes in staff requiring repetition on the customers behalf.
A financial services communication revolution?
Because chatbots can be personalised to fit certain needs, such as a financial advice they offer the potential to actively engage millennials and centennials more with their finances and the financial services industry as a whole using a platform they are already familiar with.
Able to cope with modern distractions that cost businesses huge amounts of money in lost productivity, chatbots are already being used by online mortgage broker Habito to understand applicants’ financial status. The Habito chatbot can query applicant’s financial position and ask questions covering salary, personal life and employment.
With the ability to ‘learn’ from users and present options accordingly, chatbots could save enormous amounts of time for advisers. Through a series of simple questions, advisers could gain a deeper insight into consumer needs, preferences and financial habits in a short space of time. The chatbot could then either provide a range of product options or use the information gathered as part of a financial fact find for a follow up with an adviser who can then talk product specifics.
Chatbots offer a solution to another communications issue facing financial service providers too – regulatory compliance. The much anticipated FCA social media guidance published in 2015 added some clarity to the rules of play for advisers and providers using social media for customer communication, but many believed it still lacked clarity.
By moving away from the public nature of social platforms like twitter and facebook, chatbots could prove a more suitable tool from a compliance perspective. The ability to provide standardized, recordable responses in a private setting has clear benefits over the ‘open’ nature of some social platforms, and using the same wording through pre-programmed responses will ensure consistency of message helping all customers be ‘treated fairly’.
Making advice accessible
Changes to commission structures for advisers, and increased consumer protections in recent years have also changed the advice landscape, creating a customer base who have never known a system of paying for advice. So how do advisers reach and then persuade these generations to buy the advice they’d previously received free or simply managed without?
Chatbots again offer a solution. Millennials and centennials’ love of mobile tech allows them to book hotel rooms, flights, and keep up-to-date with their banking at the touch and swipe of a screen. So it seems only natural to put advice into the same, familiar, channels.
The legal sector has had well documented success with chatbots and the financial sector should pay attention. A legal chatbot, rightly named DoNotPay, has successfully contested 160,000 parking tickets across London and New York for free, a figure that surely would not have been reached if the process involved face to face appointments and meetings.
Whilst critics would argue human emotion is vital in providing customer service, the benefits have to be worth consideration. A study by Juniper Research estimated chatbots will be responsible for cost savings of over $8 billion per annum by 2022, with a large proportion of those savings in the finance sector, a sum too large to ignore.
With improved communication to a wider sphere of in particular ‘new’ customers, improved service, the ability to track and record online conversations in a private setting and potential cost savings its likely the chat bot revolution is only just getting started.
Paul Shepherd is CEO and founder of We Build Bots