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BANKING ON AI TO DELIVER FRICTIONLESS CUSTOMER JOURNEYS

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Rob Mason, Chief Technology Officer, Applause

Banks and financial services companies play their cards close to their chest when it comes to IT, and Artificial Intelligence (AI) is no different. They prefer to rely on bespoke systems built internally, which can be a drawback for chatbots and smart voice assistants designed to interact with customers. The Machine Learning (ML) algorithms driving these systems need exposure to diverse data sets to prepare them for real-world interactions. Building AI systems behind closed doors might make them exclusive and secure, but without the proper training and testing, they could cause friction with the customer.

Today, most digital experiences, such as streaming or online shopping, are simple and intuitive, but digital banking is perceived to be slow and complex. Smart apps, chatbots and voice assistants are designed to streamline customer services, but all too often, they lack the training data ML algorithms need to respond to real-world situations. This can be corrected by sourcing vast amounts of data to improve an ML algorithm’s capacity to learn, successfully interact with human beings and make accurate predictions. The source of that data is people. As many are required to fulfil any number of customer use cases. In the case of a bank or a financial services company that could apply to any number of services that cater for a customer’s digital finance needs.

Rob Mason

 

Financial services companies place their trust in crowds

The pandemic has accelerated digitalization across all walks of life, the financial services space is no exception. As already mentioned, there are many areas of cloud and IT where financial services companies excel. You only have to look at the innovations in mobile and online banking. The constant stream of new digital banking products and the countless links to merchants and other service providers through API platforms that make paying for goods simple and straightforward. However, with so many banking, insurance and credit card customers now dependent on digital channels, self-service capabilities have become central to the digital banking experience. That process is reliant on the performance of AI chatbots. If they’re unable to interpret customer requests correctly or fast track them to a specific website, application or customer service agent, they can have a detrimental affect on a brand’s reputation.

Financial services companies can reduce that risk and increase levels of customer engagement through a process of rigorous crowdtesting that identifies any gaps or flaws across the different digital channels customers use. This technique involves a global community of vetted testers trialing new products before they’re released or helping to refine current applications and services. Either way, crowdtesting provides businesses with valuable insights about how customers interact with their products, improve user experiences and deliver frictionless customer journeys. It also augments in-house QA and testing resources within financial service companies and boosts the smaller, more disruptive fintech brands that tend to have limited resources.

A one-size fits all approach doesn’t really apply here. Banks and financial services companies have different tiers of customers, each with complex requirements and different expectations of what they want from digital services. Crowdtesting can be tailored to suit the needs of a specific company, by selecting vetted testers that match the profile and characteristics of their customers. They can quickly identify any bugs or processes that are causing friction and feed that data directly back to in-house QA teams. However, the impact of crowds on AI/ML is much more far reaching.

 

Data diversity is key to training ML algorithms

It takes time and effort to train and test an ML algorithm. The training process shouldn’t be restricted to a lab either. For a start, in-house teams of developers, data scientists and QA specialists tend to be from the same age range, gender and background. They’re not representative of the wider population and despite their best intentions their inherent biases will feed into the underlying algorithm. The best way to avoid this is to widen the net and ensure the training data has a high degree of a quantity, quality and diversity.

Crowdtesting allows financial services companies to source data at scale. Enabling them to select from a diverse pool of participants made up of specific demographics, including gender, race, native language, location, skill set, geography and any other filters that apply. The key is to expose the algorithm to different data sets and inputs, made up of authentic voices, documents, images and sounds. This tried and tested model ensures that the AI that doesn’t suffer from bias and has the capacity to continuously learn and improve.

For example, a recent project to train a smart voice assistant required over 100,000 different voice utterances. These utterances were delivered by 972 different people assembled remotely to train the algorithm. For another project 1,000 people contributed handwritten documents to provide the unique samples needed to ensure an algorithm could read human handwriting.

 

AIs show real intelligence

When you combine the diverse sets of training data with the community’s ability to spot any bias or other deficiencies inherent in AI-powered services during the test phase, the value of the crowdtesting model becomes clear. It can help banks and financial services companies to develop ML algorithms that can adapt to real-world conditions, reduce testing costs and release faster. By drawing on real-world experiences it’s possible to deliver exceptional levels of quality to customers across global markets, paying careful consideration to local language and culture. Gaining the well-earned trust and loyalty of those customers in return.

 

 

Banking

WHY THE TIME IS NOW TO BANK BEYOND BORDERS

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by Lili Metodieva, MD of Monneo

 

As our world becomes more interconnected, so too does the need for banking systems to follow suit. In the past, businesses and individuals were often restricted to banking in a single country, but the rise of borderless banking is enabling both to benefit from greater financial freedoms. In this article, we will examine why this trend is so important and explain how Fintech companies are helping to make it possible.

 

What is borderless banking?

Simply put, borderless banking refers to any bank account, which allows users to spend, send and receive money across different countries and currencies, without incurring heavy fees. The concept has become increasingly popular in recent years, with more people now working in cross-border job roles and with many businesses requiring capital in a different currency than that of their country of origin.

For customers, borderless banking is making cross-border financial transactions more efficient and cost-effective. Through its rise, businesses and individuals can gain easier access to international streams of capital, which is crucial in this current moment of economic uncertainty. In fact, 74% of companies say cross-border payments have helped their business to survive [1].

 

Where do IBANs come in?

International Banking Account Numbers (IBAN) play a crucial role in facilitating borderless banking. The globally recognised system enables cross-border transactions to happen safely, by providing each international bank account with its own unique 36-digit alphanumerical code. On account of this code, financial institutions can quickly identify where funds are coming from, as well as where they’re going to.

More recently, providers such as us have been able to deliver Virtual IBANs (vIBAN). Working alongside a network of well-established European and International banks, we’re able to offer businesses a single platform interface that consolidates the management of all IBAN accounts. In turn, our multi-currency service makes conducting global financial transactions incredibly straightforward.

 

How has Brexit affected borderless banking?

The COVID-19 pandemic has accelerated the growth of borderless banking and services related to it, but other developments, such as Brexit are beginning to stand in its way. Most notably, the drawn-out withdrawal process has seeded a growing reluctance amongst risk averse, larger organisations to settle transactions using UK bank accounts or IBANs, due to unfounded concerns around regulatory complexity.

Despite leaving the EU, the UK remains a member of the Single Euro Payments Area (SEPA), so it’s unclear why these concerns around British IBAN accounts exist. Regardless, this unfortunate development must be addressed quickly as it has the potential to adversely affect the livelihood of businesses and individuals at a time of critical need.

 

What does the future hold for borderless banking?

There’s clear demand for borderless banking and borderless payments, but the discrimination of certain IBAN accounts represents a major obstacle, which could stand in the way of their widescale adoption. Moving forward, there needs to be a push towards borderless IBANs, which will make international financial transactions more reliable. At the end of the day, this is what IBANs were originally created for, so it’s important the current problems are rectified quickly.

To ensure this can happen, the industry needs protection and clarity from regulators. Likewise, it’s now time for membership organisations to stand up on behalf of the sector and lobby for the financial inclusion of businesses.

If the confusion regarding UK IBAN accounts can be sorted in a timely manner, businesses across the nation, as well as those further afield can look forward to a future of more streamlined and effective financial services. With this support, the diverse sector can deliver further access to innovative financial services and products, which improve outcomes for businesses and consumers alike.

As a sector, Fintech has the potential to provide vital assistance to the wider economy, particularly in an era of increased cross-border business. At Monneo, we’re committed to being part of that change and as a part of organisations like ‘Accept my IBAN’, are working towards reporting and ending IBAN discrimination.

[1] – https://www.mastercard.com/news/research-reports/2021/borderless-payments-report/

 

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Banking

IT’S TIME FOR BANKS TO SIT THEIR CUSTOMERS DOWN AND TALK OPEN BANKING

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Eugene Danilkis, CEO at Mambu

 

We are living in an experience economy, and banking is no different. Customers need innovative payment and finance management solutions. New entrants are edging into the landscape and challenging existing players. This should mean users have a better view of their finances and the tools they need to manage their money – but banks are failing to deliver.

Personal finances are a complex beast, emotional pulls are strong, and the worry of financial security is always on the mind. It’s the job of banks to be the shoulders customers can lean on and trust.

Open banking was supposed to take this to the next level, enabling banks to deliver personalised products and services based on improved data sharing and customer insights. But three years on, adoption remains sluggish. So, why is open banking failing to live up to its promise?

 

A missed opportunity

Open banking was introduced to the UK in 2018, but consumers are still mired in confusion as to what it means and how it helps them. According to Mambu’s global open banking survey, 61% of consumers say they’ve never used open banking, despite more than 8 in 10 using one or more mobile banking apps.

Eugene Danilkis

This is a problem for banks and consumers alike. Lack of understanding around the technology is hindering its adoption, despite this being in the best interests of both. By enabling the secure sharing of financial information, open banking creates an improved customer experience. Not only does this minimise friction and make online payments faster and easier, but allows for personalised services and greater automation, enabling customers to take advantage of tools like budgeting apps.

For banks, open banking is an opportunity to build innovative new products that will improve the customer journey, helping them retain accounts and acquire new ones. By collaborating with third parties, banks can hyper-target customers and build services that address specific user needs, increasing customer satisfaction and in turn brand loyalty.

It’s true there’s been a recent spike in open banking users. According to Juniper Research global, open banking users rose from 18 million in 2018 to 40 million in 2021. But this can be traced to the necessities of a pandemic rather than any sudden clarity in communications.

 

Putting customers at the heart of communication

Mambu’s research shows more than half of consumers (52%) have never heard of open banking. COVID-19 may have increased the uptake of the technology, but it hasn’t increased understanding among users.

So, what can banks do to encourage consumers to embrace open banking? Fundamentally, they must better educate their customers in terms they understand. This means talking to them like human beings, using clear and transparent language to simply explain the personal benefits open banking brings and why it’s really just smart banking.

The understanding gap between technology and terminology shows that consumer demand is there, but better communication is needed. Making sure consumers truly understand the tools they’re using, the control they now have over their finances and how open banking improves the customer experience is vital to dispersing the current fog of confusion. It’s the benefits of this technology that banks need to hone in on: customers ultimately care about what open banking can do for them and how it’s going to make their lives easier.

Centering the customer and their needs in this way will allow banks to fully realise open banking’s potential. The technology has already given them the opportunity to develop valuable services for customers that help build brand loyalty. But the industry has failed to put the customer at the heart of their communications and processes, and show them how much better banking can be.

 

Building trust

Key to reversing this trend is addressing consumer concerns around data privacy and financial safety. Yes, banks need to prioritise simplicity and clarity in messaging, but this isn’t an excuse to shy away from important conversations. Just because there’s an understanding gap around open banking doesn’t mean consumers aren’t switched on about tech and financial issues.

Mambu’s survey found nearly three in five customers have concerns about privacy and security in relation to open banking. So, it’s vital that banks provide reassurance and relevant information about data sharing from the outset if they’re to assuage these fears.

The industry can also encourage greater adoption by developing and improving open banking interfaces. Banks are the gatekeepers to how easily end-users can authorise certain actions, manage third-party access and navigate different open banking functions. If the interface is user-friendly, customers will have a better experience of the technology and be more likely to use and recommend these services.

 

Time to get talking

Customer communication is holding the industry back.. The ability of open banking to transform financial services is a concept that industry players are well-versed in. But the feeling isn’t mutual for customers.

Banks are failing to capitalise on the open banking opportunity by engaging with new and existing customers about what the technology can do for them. Debunking  common myths can open the door to increased growth and trust for banks, as they seek to open up new revenue streams post pandemic..

Make no mistake, open banking isn’t going away. But customers will if banks don’t get talking.

 

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