Finweek: My personal banker is a robot


By Johan Steyn, November 2021

Published by Finweek


The smart technology era is changing how clients interact with their banks. A new generation of banking clients, growing up in a digital world, regard banking relationships differently. Will relationship bankers be able to adapt fast enough?



“Alexa, how should I invest my money?” The 20-year-old recently started her first job. Tracy, fresh from graduating from university, is looking for financial advice. And not just the typical one size fits all kind of advice. She is looking for information tailored to her personal life and financial profile. She is looking for instant feedback in the digital channel of her choice.


Her father urged her to visit the local bank branch. His relationship banker has been a friend for many years. This is what relationship management conjures up: one-on-one meetings between a relationship banker and a client, offering advice on financial matters such as cash management or other requirements. When it comes to relationship management, the high-touch strategy has long been regarded as relying heavily on the abilities and relationship skills of the individual banker.


However, as clients become more demanding and self-reliant, and banks seek higher levels of productivity, these kinds of relationships are fading. This is why our story starts with the young lady speaking with her smart speaker. She and her friends are used to interacting with smart technology. Their idea of personal relationships is different from that of their parents. Comfortable living in the virtual world of social media, learning from a young age to use technology, they do not always seek human interaction.



Digitally connected banking

Client relationships, which relationship bankers have spent decades cultivating, are what they live and die by. The trend toward more digitally connected banking is unavoidable when it comes to loans, deposits, or other services in the banking industry. Retail and business behaviours are driving this change, and banks are being compelled to move at a rate they are not used to.


In the digital age, relationships will not disappear; rather, they will undergo changes due to technology. As future generations become more tech-savvy, financial institutions must analyse what makes a leading digital relationship. At too many banks the service culture has been replaced by a compliance culture, one in which the customer comes second.


Virtual assistants are more than just a new way to gain access to various services. The creation of new social standards concerning privacy and security, work and leisure, as well as the intimacy and empathy of human-technology relationships, are necessary to meet these challenges. What is it like to be a part of such systems? What kind of behaviour do they expect them to have?



Insightful digital banking

Customers prefer it when banks fix problems for them instead of creating new ones. By utilising data analytics, bankers can gain insights into customer account activity and future demands that are superior to what can be provided by a single banker alone. Both large and small business consumers should benefit from improved bank insights.


Customers want omnichannel access as they now expect internal systems to communicate with one another. Many banks continue to rely on antiquated systems that necessitate manual data entry or have poor internal communication. Traditional banks must adapt their analogue procedures to the new global order, which is a difficult task. Because of outdated systems, many banks are unable to go digital. Numerous financial institutions have been hindered from embracing digital transformation due to obsolete systems.


Behavioural banking

Because of the high stakes and uncertainty associated with financial decision-making, technology-enabled, self-service channels are particularly challenging to optimise for financial services. Money causes anxiety and people who are apprehensive want reassurance from other human beings. This can result in reduced levels of satisfaction as well as decreased trust.


A bank’s ability to upsell or cross-sell to a customer in the future will be based on actionable data and customer behaviour intelligence. The ability to predict when and where a customer will need your bank to solve a problem or meet a need will be the catalyst for a real-time, or near-real-time, highly relevant cross-sell or upsell engagement. Differentiation will be determined by your data pools, partners, and insights that lead to the right trigger at the right time, as well as your ability to deliver that contextually with the least amount of friction.


Although some will look at this as a continuation of database marketing, behavioural models will prove more important than segmentation and targeting. It is a dramatic change since marketing departments lack these skills. It is a matter of modelling data, not targeting and market research is not the same as data science.


Voice-user interfaces and augmented reality displays for information and feedback are both technologies that can move banking away from day-to-day interaction and sales. The bigger difficulty is that in this new era, the capacity to acquire, cross-sell, and upsell depends on fundamentally different skills than before.



No one left behind

Banks should not limit their attention to digitally savvy, internet-connected customers. Consider developing compelling “low tech” solutions for pay-as-you-go phone users or consumers living in areas with poor broadband connectivity. Look for ways to improve member communication via email, text messaging, or social media direct messages.



Human interaction will not disappear

Identify technology-enabled strategies to better utilise and enhance your customer-facing workforce. Instead of replacing human service encounters with automation, how can you give customers a map to help them navigate your website and digital systems? To maximise limited time, how can technology prioritise customers who require face-to-face contact with bank employees? What dashboards or back-office solutions can you offer your employees to help them better serve your customers?



Minimise branch visits

Do you support digital signatures for loan applications, or do members still need to visit your branch to complete a transaction? Accelerate the development of technological solutions to reduce visits. Facilitate remote conversations ahead of required visits to reduce contact time while maximising relationship-building opportunities to impress and even delight customers. With the pre-work done online, the branch visit can be more personal and caring, rather than clinical.



Financial well-being is a priority

Place a premium on financial well-being in your service value proposition. People require tools to assist them in planning and preparation during times of uncertainty and flux, and the finest solutions offer both customisation and contextualisation. As a result, demand for personal financial management services will continue to increase in the future. It offers consumers a financial well-being toolkit that includes budgeting and cost tracking technology, income smoothing and savings apps, bill negotiation, loan repayment and credit management and repair, as well as investment and portfolio optimisation.



Human bankers in the loop

Remote channels have the advantage of allowing customers to choose how much engagement they want to have with their bank. They may choose to avoid involving a human if they so desire. Mobile banking's seclusion and perceived anonymity can be a welcome alternative for customers who don't want to have awkward encounters with customer support employees. The most essential step in your service value chain is the shift from automated to human interactions. Getting it right will increase loyalty while getting it wrong will result in lower engagement and higher turnover.



Maybe not a robot, but a robot-supported banker

Who knows how the future of technology will unfold in banking? One thing that seems sure is that technology will drastically change the way clients choose to interact with their banks, and therefore the way banks interact with clients will have to change too.


Perhaps Tracy, featured at the start of this article, will learn the value of human interaction in managing her financial affairs. We are hard-wired for human interaction. I wonder if a robot will ever be able to be a trusted financial advisor. Humans need to accept that smart technology is here to stay, that it advances drastically and that it can support us in ways previously unimagined.