The Human Touch in Digital Banking: Balancing Automation and Personalization

For almost a generation now, financial institutions have embarked on a bit of a digital arms race. Starting with the simplest online banking applications and moving up from there, digital banking assets were collected. Technology vendors purchased newer products and included them in their digital suites using traditional programming technology to create interfaces.

Today, however, the use of API technology allows for easier connectivity between various technology platforms and has opened the door to a new phase in digital transformation, one that allows an institution to take advantage of the automation provided by technology while also bringing that technology to customers (and employees) at a much more personal level. Finding the right balance between automation and personalization is the riddle-du-jour for today’s practitioners, and it requires a much more nuanced approach to decision making.

In our last post Future-Proofing Financial Institutions: Navigating Trends, Technology and Strategic Innovation, we looked at how emerging technology can give FIs the ability to understand and know their customers at a deeper level than ever before. In this blog, Tom McGill, PRI Director of Customer Experience, writes about how to effectively balance emerging technology that provides automation without losing the human touch.

“Customer engagement is the process – or journey – that can result in increased loyalty, advocacy, and customer lifetime value,” McGill said. “We have seen that technology can deliver a more personalized service by allowing FIs to know what is needed during a customer’s financial journey and curating the experience for them, without stretching an already challenging talent pool too thin. However, it is a balancing act, and one that becomes dicier as technology comes at us with such rapid-fire.”

Here are some keys to striking the correct balance:

• Personalize communication.

Automation can be used to personalize messaging and alerts based upon customer behaviors and preferences. The days of “Dear Valued Customer” communication are quickly ending, as are the days of everyone receiving the same product offering.

According to The Financial Brand article Best Customer Experience in Banking Blends Digital with Human Touch, USAA has consistently ranked first among online-only banks in customer experience ratings because of its tailored content sent to its heavily military consumer base. For example, USAA’s systems alert its staff to patterns that indicate a significant life event, such as a move to a new assignment or deployment to a war zone. After the staff reaches out and determines what’s going on – inserting the human touch element – it can personalize content sent to those consumers. Alyson Clarke, Principal Analyst at Forrester, calls this “big data done right.”

• Focus on user-centered design.

Develop and deploy digital banking solutions that focus on the user experience. This holds true no matter who the user is. Interfaces should be intuitive, navigation must be easy, and features must be complete – but not overwhelming. The ability to segment the presentation layer based upon user profiles is considered best-practice.

When rating USAA’s approach to humanizing the customer experience, Forrester’s report states, “The firm has experience owners, not product owners who live and own the product and all touchpoints from a holistic view. And designers are at the center of every initiative.”

• Engage customer-facing staff in the decision-making process.

Historically, automation and digital banking decisions have been the bailiwick of operations and IT staff. While the role that these groups play is essential in the decision-making process, the filters of efficiency, cost, and control cannot be the only factors at play.

“Understanding the customers’ perspective is critical to making the best decision and engaging the customer-facing staff is the best way to make sure this happens,” McGill said.

• Plan strategically.

Before embarking on any sort of digital journey, an institution should have an agreed-upon strategy that can be used to filter all the new entries in the digital and automation spaces. Execution is critical to success and absent a strategy which binds everything together, the risk of digital thrashing is high.

Part of that strategic plan, however, must be an investigation of new things happening in the space. No better example of this exists than AI. One year ago, most banks had not spent any time thinking about AI. Today, most banks should be thinking about when and if to include AI in their toolkit of automation tools.

Kendra Ramirez of KR Digital Agency is a leading voice in the AI space. Her blog post How to Vet AI Tools discusses seven questions to ask when choosing AI products, including what problem they solve and what results and level of accuracy are typical. These are vital considerations for a financial institution thinking about bringing AI on board to increase automation.

Digital banking’s future exists at the confluence of automation and personalization. By embracing technology while keeping the human touch at the forefront, banks can provide a digital banking experience that is both efficient and personalized.

Resources:

Best Customer Experience in Banking Blends Digital with Human Touch – The Financial Brand

Future-Proofing Financial Institutions: Navigating Trends, Technology and Strategic Innovation – PRI

Unlocking Customer Engagement: Strategies for Enhanced Experiences – PRI

How to Vet AI Tools – Kendra Ramirez, KR Digital Agency

Profit Resources specializes in identifying profitability improvement areas for financial institutions through revenue growth, cost control, streamlining processes, and effective use of technology. Contact us to learn more about our personalized approach to propel growth and improve profitability.