2020 left many financial institutions struggling to keep up with a tsunami of new demands and competitive challenges. Banking call centers are often overwhelmed, and customers’ financial needs are growing more complex. Add to that, tech giants like Apple and Google are wooing away consumers with seamlessly simple digital-first card experiences.
How can banks and credit unions solve these problems faster and better to gain efficiencies and drive growth?
Fintech makes it possible. Many financial institutions (FIs) are eyeing artificial intelligence (AI) and machine learning for their digital transformation, but building solutions in-house could take months or years. Partnering with a fintech company can dramatically accelerate time to market. It enables banks to offer new digital capabilities that optimize customer experience while significantly improving operational efficiency.
Fintech apps are highly tailored to solve a specific problem for a specific user, whereas the bank technology provider’s user experience is one-size-fits-all. Leaning on a fintech partner to create a new experience that consumers are clamoring for is fundamentally different1
At Beyond the Arc, we’ve been tracking the evolution of fintech for the past decade. In our work with fintech companies, we see how leading-edge solutions are transforming banking operations. Here’s a snapshot of how FIs can improve profitability and competitive advantage with tech-driven efficiency.
Streamline customer service with AI-powered assistance
The recent economic crisis pummeled banks and credit unions with unprecedented demand for customer service. At a time when consumer debt had topped $14 trillion2, the pandemic threw over 30 million people out of work. Millions sought help to defer mortgage and credit card payments, or apply for loans – and were forced to wait hours on hold to get relevant, personalized assistance.
Fintech is solving that with AI. Our client, an industry leader in digital customer engagement solutions, notes that the majority of calls and web chats often include repetitive requests that don’t need a live agent. Many inquiries and transactions can be handled by a conversational AI-powered chatbot. It speeds service to customers, and frees up call center agents and bankers to handle more complex issues.
Similar to talking with a banker, the chatbot asks questions to understand the customer’s specific situation to provide the most relevant guidance. Best of all, an AI-driven solution can rapidly access multiple virtual libraries to ensure each customer is given the latest, most accurate information and recommendations, all with a documented audit trail for compliance.
Still think AI seems daunting? Best of breed solutions for AI-powered chat can be up and running in weeks.
Increase growth with a simpler payments experience
“[Banks] attempt to stuff too much into a mobile app. Many apps are growing fat, which slows down functionality, and makes key features difficult to find. Mobile apps should concentrate the most space and visibility on essential functions, identified by consumer usage patterns.”
Digital payments are becoming the new norm. Nearly 78% of consumers worldwide have now changed how they pay in order to reduce contact.3 Unfortunately, as FIs keep piling on mobile banking features, apps have grown complex and hard to use. Apple and Google seized this opportunity and raced ahead to offer frictionless payment experiences that are disrupting traditional banking.
People want to feel in control of their money, now more than ever. They want to be able to apply, receive, and start using a credit or debit card in minutes, all from their smartphone. If their plastic is lost or stolen (or the account is compromised), consumers want the ability to instantly turn off that card and receive a virtual replacement right away. And do all of that in one simple mobile app.
With most FIs, that’s not possible. Payments are the most frequent interaction people have with their bank or credit union, yet the card experience often requires too many channels and too much time. Speed and conveniece are now essential for winning and keeping customers.
When it’s imperative to simplify your payments CX, fintech expertise can really pay off. Innovators like our client, a provider of white-label digital card services, enable FIs to give cardholders powerful self-service controls and greater spending clarity in a modern, digital-first app. The net effect is lower support costs, reduced fraud, and higher customer satisfaction.
Speed financial wellness engagement with AI-driven coaching
91% of customers who receive digital advice from their bank report a high level of trust.5
Today’s consumers expect personalized experiences — especially digital-natives. Now combine that with millions of people seeking knowledgeable financial advice as they struggle to manage debt, rebuild credit, or save to buy a home. Together, it means financial institutions have a critical opportunity to win and grow business by focusing on financial wellness engagement.
But how can FIs afford it? Typically, it has been too expensive to advise a broad base of retail customers, so only affluent segments get personalized attention. But millennials and Gen-Z represent over $3 trillion in potential spending power,6 which means attracting and adding value for these audiences could be vital for longterm growth. A fintech partner can make it viable – and profitable.
For example, one of our fintech clients offers a conversational AI solution for digital financial coaching. With a highly personalized, gamified experience, customers can work with a virtual coach to develop an action plan and receive incremental advice for each step they need to take toward their goal. And, like a human coach, the AI-powered coach provides motivational reminders, celebrates progress with badges, and so on.
Digital financial coaching can be a differentiator. Banks that make customers feel like their financial well-being needs are supported will be well-rewarded in increased share of wallet, engagement, NPS scores and revenue, according to Gallup.7
Personalization is key, and that’s what makes AI an ideal solution. “Financial well-being is so subjective and contextual that generalized service standards will fail to change customer perceptions,” notes Gallup. AI-driven coaching enables the personalization and digital convenience customers want, in a cost-efficient model that’s easier for FIs to implement quickly.
About Beyond the Arc – Supporting the future of banking
Fintech innovation is at the heart of next-gen banking. We help fintech companies simplify the complex with engaging content marketing that makes the business case for their solutions, and provide clear, conversational scripting for AI chatbots.
Our data science team advises fintechs on data strategies, and can help financial institutions identify potential fintech partners to meet specific needs.
Interested to learn more? Ping us for a quick chat.
1 4 Myths Preventing More Fintech+Banking Partnerships, The Financial Brand, May 1, 2019
2 Consumer debt hits new record of $14.3 trillion, CNBC, May 5, 2020
3 The great digital migration: 78% of consumers are changing payment methods, Mobile Payments Today, Aug 2020
4 Mobile Banking: Financial Institutions Must Clean Up Their Apps, The Financial Brand, June 1, 2020
5 3 Tips For Retail Banks Rising To New Customer Expectations, CMO by Adobe
6 17 Shocking Stats About Millennials and How They Mortgage, Lender HomePage, June 2018
7 Banks: Support Financial Wellbeing, Get Committed Customers, Gallup, Nov, 2019