Self-Service Banking Grows More Important in a Post-Pandemic World

As many consumers continue to worry about contact with potential COVID-19 sources, they seek more help from self-service channels. However, only one out of ten issues reach final resolution without the consumer having to resort to a live agent.

The pandemic has had a profound financial impact on the world economy, and individual consumers are feeling the pain. Customers’ anxiety around their personal finances and the economy’s future means they’re urgently seeking easy and fast access to customer service and support when they need it.

The public health crisis will subside, but the economic impact will persist. Financial services can improve efficiencies without sacrificing quality customer experience by adopting digital service channels that accurately address customer needs. Companies delivering strong digital experiences will not only see greater customer acquisition and retention but will create greater value for stakeholders in the long-run.

The total returns to shareholders of publicly traded companies during the 2007-09 crisis were three times higher from companies recognized as leaders in Forrester’s Customer Experience Performance Index. Even in traditional sectors, such as banking, “digitally resistant” consumers who prefer interacting with an agent can be persuaded to adopt digital channels with a low-effort, personalized self-service experience that accelerates resolution time.

The Role of Self-Service in a COVID-19 Context

During the pandemic, consumers are increasingly turning to website or in-app chat (47.34%) to resolve issues. However, more than 25% of the time consumers are “dissatisfied” or “very dissatisfied” based on resolution time. This isn’t surprising, considering that, prior to the global pandemic, a reported 70% of customers were using self-service channels during their resolution journey, but just 9% are resolved start-to-finish without switching to a live agent.

Traditionally, customer satisfaction (CSAT) has been regarded as the ultimate measure of customer loyalty. However, according to Gartner research, a more telling indicator of customer loyalty, especially amidst the stresses and sense of urgency surrounding COVID-19 and other times of crisis, is customer effort, that is, the ease of customer interaction and resolution during a request. In fact, customer effort is 40% more accurate at predicting customer loyalty than customer satisfaction. A brand’s customer effort score (SEC) is determined by customers answering just one question: Did the company make it easy for you to handle your issue?

Leading financial services companies have a customer engagement strategy to foster loyalty with a focus on a self-service strategy that prioritizes faster resolution. As a lower-effort interaction than live channels, self-service is also the biggest opportunity to reduce costs.

Low-effort experiences have been found to reduce costs by decreasing up to 40% of repeat calls, 50% of escalations and 54% of channel switching. In comparison to live channels, such as phone, live chat and email, which cost brands an average of $8.01 per contact, self-service channels cost about $0.10 per contact. Overall, a low-effort interaction costs 37% less than a high-effort interaction.

Gartner has identified that the design of a low-effort, faster resolution process has three critical functions:

  • Focusing on customer outcomes.
  • Managing customers’ perception of the outcome.
  • Staying ahead of foreseeable issues.

Intelligent Self-Service Will Make or Break the Future

Now, more than ever, consumers are looking to their banks and other financial service providers for a sense of assurance, trust and help. Scaling personalized service and communications requires intelligent self-service via AI-powered interactive voice response (IVR) and chatbots. Yet, three out of four financial services providers agreed they are not prepared to implement AI in their operations.

For customer inquiries made through a call, an interactive voice response (IVR) system equipped with AI can recognize a customer’s intent, to provide answers, understanding requests that aren’t a part of a predetermined menu of options. AI-powered IVR can also be used to intelligently route calls to reduce handling time or give callers the option of receiving either a callback, switch to chat, or SMS message from the next available agent, rather than wait in a queue.

Similarly, AI-based chatbots, which have natural language understanding (NLU) capabilities, can complete more complex tasks to reduce escalation to a live agent. Today, companies have a number of platforms to choose from to provide the APIs, infrastructure, and tools needed to build intelligent bots. These platforms are commonly referred to as conversational AI platforms, and let you focus on building a bot experience that works for your users without worrying about the underlying capabilities or infrastructure. After implementing a virtual customer assistant (VCA), organizations report a reduction of up to 70% in call, chat and/or email inquiries, and 33% savings per voice engagement.

Improving Customer Confidence During the COVID Crisis

Customers abandon self-service when they lose confidence in their ability to resolve an issue without the help of another person. More specifically, Gartner’s research found that the top three factors impacting customers’ confidence in self-service are:

  • Clarity: how easy it is to understand or act on given information.
  • Confirmation: assurance that indicates resolution.
  • Credibility: the utility or relevance of information.

Voice assistants, built on AI, use automatic speech recognition (ASR) and Natural Language Understanding to accurately respond to customers with relevant answers. Unlike chatbots, conversational AI uses advanced algorithms to train itself from data inputs and subsequently improves at predicting questions. Conversational AI can complete tasks, including paying a bill, completing orders, and providing instructions to customers without channel switching. The adoption of voice assistants is set to triple over the next few years with 8 billion digital voice assistants in use by 2023, up from the 2.5 billion at the end of 2018.

Neobank Chime is an example of a relative newcomer to the financial services industry whose digital-first approach prepared them well. The online bank combines SMS, an AI-powered chatbot, and an IVR solution that integrates with its existing CRM to automatically authenticate customers as soon as they call.

While COVID-19 has exposed vulnerabilities for financial service providers, it has also opened the door wide for rapid and meaningful evolution to better serve customers and build stronger institutions alike, now and well into the future.

About Bijon Mehta

Bijon is the Global Head of Financial Services at Twilio. He has over 25 years of wholesale and consumer banking experience. Mehta has worked at four global banks, managing teams focused on product development, machine learning, innovation and API businesses.

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