Written by David L. Tuyo II, DBA, President/CEO
Originally published October 16, 2020 on cuinsight.com.
Despite all the excitement around innovations in fintech, larger and more traditional financial institutions are typically a little bit slower to adopt due to their complexity and size. Particularly with artificial intelligence, traditional financial services have always been eager to capture its potential but sluggish to fully implement.
However, this has changed rapidly due to the onset of COVID-19. In the past few months, there has been over a 200% increase in mobile banking registrations and an 85% increase in mobile banking activity.
This is a trend that is unlikely to change soon. In fact, 57% of consumers prefer internet banking in response to COVID-19 and it’s a rate that is likely to increase.
The digital shift in consumer behavior has many implications for the financial services industry and it’s opened a new door for innovative fintech solutions to assist with the surge in online banking activity.
One trend that is rising in popularity amongst the more innovative financial institutions is the emergence of Artificial Intelligence Virtual Assistants as a method for providing better member support.
What Is Driving The Implementation Of AI Virtual Assistants?
Member service channels for most financial institutions have become overburdened in the era of COVID-19.
This is a critical risk for financial services. It’s a risk because many people are already feeling overwhelmed with financial stress due to a challenging economy and any additional barriers to finding the member support that they need can further exacerbate their anxiety.
Fortunately, innovative fintech solutions already exist and the climate is perfect for the rapid implementation of them within the existing framework of most financial institutions. Many of the industry-leading banks and credit unions have already launched AI-powered virtual assistants or chatbots to help provide faster and more reliable member support.
Financial institutions need to adapt to consumer behavior otherwise they risk falling behind as a necessary service. This means that they must find new ways to accommodate the surge in online banking activity without any friction to the normal member support experience that has become expected by most of their members.
Why Are AI Solutions More Appealing Than Hiring More Member Service Representatives?
People-power is incredible and it always takes dedicated and creative humans to overcome major challenges.
Of course, there is an inherent challenge to scale when you are entirely reliant on people, instead of technology, to expand the capacity of a team. Furthermore, redundant tasks that are repetitively completed by people over and over is a waste of human potential.
If member service channels are overloaded, then a natural response might be to simply hire more member service representatives. In a more traditional environment, this might have been the right path towards a member support solution.
However, reality is demonstrating that this is not a blip in consumer behavior, but rather an evolution of consumer trends, which requires modern solutions in order for financial institutions to truly adapt with the increased demand to interact virtually with members.
AI virtual assistants and AI chatbots are a strong member service solution and they provide many advantages to financial institutions such as:
- Flexibility to adapt to member support demand without hiring or firing staff
- Faster and more reliable member support
- Eliminates redundant or repetitive member support tasks from workflows
- Improved data collection and reporting
What About The Personal Touch Of Member Support?
One of the major concerns against implementing AI virtual assistants or chatbots is that there will be a painfully obvious lack of the personalization that a human member support representative can typically provide.
While this is a valid concern, particularly amongst credit unions where members expect a certain degree of personal support for their accounts, it is also an underestimate of the capabilities of artificial intelligence.
Artificial intelligence solutions can actually help streamline personalized support in two ways:
- AI virtual assistants are capable of providing a personalized experience for standard transactions and member support queries.
- AI virtual assistants can identify more complex requests and connect members to support more efficiently.
Admittedly, the youngest versions of these tools can be clunky or respond to queries in a way that seems inaccurate. However, as machine learning takes hold, AI chatbots can be extremely effective at providing replies to member support requests as it learns to identify patterns and behavioral trends.
Furthermore, AI chatbots can act as part of a qualification process and can connect members with member support agents faster and more efficiently by providing background information and data on those members.
While AI is not, and may never be, a replacement for human support, it is definitely an extension or tool that enables a higher quality of ongoing member service from real member service representatives.