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CONVERSATIONAL BANKING: MOVING BEYOND AUTOMATION

By Martin Linstrom, Managing Director UK&I, IPsoft

Automating business processes is a cost-efficient way to ensure smooth customer service. But there’s a substantial difference between quickly fixing a single problem, and consistently providing an optimal customer experience.

A personal banking concierge

With conversational Artificial Intelligence (AI), banks are starting to evolve customer service processes without having to invest in additional resource. It’s no longer just about automating the troubleshooting of tasks, or helping customers reset their passwords. In reality, the bank is giving every single customer a digital concierge that can help them find new products, research account and loyalty programme options, and even handle high-value tasks such as mortgage application processing or assisting the internal HR team with employee benefits selection.

Routine transactions that require manual completion by bank staff cost businesses 20 times more than transactions handled by customers online, according to Bain & Company. Rather than dedicating staff (and 20 times the resources) to handling rote processes, banks should be focusing workers on only the most important tasks. However, a critical distinction exists between what’s defined as automation and what qualifies as an AI-based solution. In other words: How you choose to automate your customer service tasks matters a great deal.  

Chatbots won’t provide all the answers

Martin Linstrom

When customers have a question pertaining to basic account changes, they will typically go on their banking app or to the website seeking an answer. Some of these questions may be simple: How do I transfer funds? How do I add my partner to my account? Companies often makes it easy for customers to search and find these answers within the existing content of their website. But what happens when customers are ready to take action on the basic information they’ve received? Many companies have adopted simple chatbots that can automate rules-based processes. If a customer asks Question A, the chatbot helps her complete Process A. This has served banks moderately well for the past five years. Unfortunately, if you’re one of the companies that has deployed a chatbot, your customers have likely encountered frustrating limitations that negatively impact user experience.

One of the critical drawbacks to working with a chatbot is its reliance on sequence to automate basic service needs. Customers may only visit a website with a single query, but they may also come to it with five distinct questions or think of additional things to ask during the course of their visit. Within the standard and scripted processes followed by chatbots, each question and its associated automation must be handled individually and within its own strict context. Deviation from or interruption within that context often leads to a dead end.

Automated multi-tasking

For example: A customer comes to a site and types to a chatbot, “I’d like to check my loyalty point balance, but I noticed someone just put a fraudulent charge on my account. I’d like to cancel my credit card and order a new one.” Within this single message there are five distinct business intents that must be automated. A chatbot that by design follows a strict sequence will not take into account any urgency to these requests (the fraudulent charge) and it will not find the most logical resolution path. Instead, a scripted chatbot will handle the first intent, and reports the customer’s loyalty point balance. Only then will the chatbot proceed to checking for a fraudulent charge. Clearly, the customer would view their priorities a bit differently.

Learning to prioritise

A digital colleague doesn’t need to accept information in a strict sequence in order to automate tasks. Although a digital colleague’s brain doesn’t entirely replicate human thought processes, it’s more nuanced than a scripted chatbot in how it processes information to make decisions – and it certainly provides more than automated processes. With the aforementioned fraudulent charge use case, a digital colleague will process all of the intents within the sentence (loyalty points, fraudulent charges, account cancellation and a new card request) and determine that pausing the customer’s account to prevent additional fraudulent charges is the obvious first step. Only after the digital colleague has handled the more important processes will it move onto simpler tasks, such as loyalty point balance checks. 

The more complex the sequence of intents, the less capable a basic chatbot will be. This is particularly problematic when dealing with high-value tasks such as processing mortgage applications or helping customers book travel arrangements. If your conversational digital colleague is forced to follow strict sequences in order provide support, they will never be able to assist with and complete processes that require dozens or even hundreds of steps – some of which will need to be revisited multiple times within a single conversation – leading to undue time and effort on the part of a customer.


Don’t confuse automation with conversational AI. Basic automation delivered by chatbots makes simple processes easy for software to repeat, but that’s where the benefits end. Conversational AI from a digital colleague allows your business to automate at scale the nuanced, intelligent service provided by your best human employee, going ‘off-script’ to answer more complex queries and carry-out lengthy requests like mortgage applications. Ultimately, this means banks can deliver a positive customer experience for every single interaction, without the oft-encountered frustration seen when customers can’t get what they want from a chatbot. Banks that want to ensure consumer loyalty, higher customer satisfaction and continue driving a healthy bottom line should look to conversational AI as their next big initiative.

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TIPS FOR BUSINESS EXPANSION

Alan Sutherland, CEO of Kind Consumer

 

Every successful business had a beginning.  Its founders usually looked for ways to gradually expand, attract new customers and increase monthly revenue.  From the outside looking in that type of success often feels as though it requires some form of magic or hidden formula.

So how do you drive success?  There are two which are fundamental to success.  On first glance they may seem obvious, but they are often neglected.

 

Do you have a strong team?

No matter how great your business or idea you will not drive it to its full potential without a strong team behind you.

The process of recruiting and finding the best talent is never easy.  You must over-invest time in the process as it is a fundamental investment and future growth driver.  Two principles I have learned over the years when looking at recruitment are, to surround yourself with people who are better than you and do not be afraid to recruit someone who could make you redundant.

If you can achieve these, the benefits are clear.  Better business results, stronger talent pool, and with capability future fit plus built-in succession planning.

 

Have you created a road map?

Strategy should not be complicated, as it is the set of choices you make to help you deliver your goals.  It is your roadmap.

In thirty plus years of corporate life I have reviewed many.  Countless textbooks have also been written on the subject, but there are some basic principles that I firmly believe work best.  Namely, the vision should be clear, motivating, and understood by all in the organisation.  In addition, it’s important to remember ‘less is more’.  Too often strategy papers can be voluminous and complex.  The best strategy work I have seen is on one piece of paper with clear, simple articulation of the choices you will do and equally what you will not do.  It is very empowering to tell a team what you are not going to do.

 

Alan Sutherland

Have you established a core market?

In any business, the “core” needs to be healthy before you divert any significant level of resource to expansion, there are thousands of examples where enthusiasm to grow has caused companies to fail.

As you evaluate expansion, having an array of ideas and opinions needs to be balanced with a clear brand that consumers feel they relate to.  Whilst adding new products or services is an organic part of company growth it needs to be tempered, so you do not drift too far from your core market.

Therefore, before ploughing resources into new markets, you do need to ensure that new product and services will be of value to existing (or new) customers.  You may need to ask some critical and challenging questions such as, is there a clear need for this?  Is it marketable?  Does it sit within the brand equity?  How much will consumers pay for it?

If you conclude that the demand is there, only then should you move onto executing that new idea because it will require a significant amount of investment of time, resources, and money.  If the market entry cost is potentially high, you should also evaluate a test & learn approach by launching in a limited way and, if early traction is good, then expand.

Once you have revised your existing offering, you need to engage with these new consumers to increase brand recognition.  If your business is not online, add this to your to-do-list because in today’s era, convenience is key.

A website is the shop window to your brand and, done well, can allow you to build up a direct one-on-one relationship with your customers.  If it was already an important criterion before, the impact of Covid-19 will make it indispensable.

With social media and the abundance of mobile technology, it is not difficult nor expensive to drive traffic to your site, so you need to ensure the site is engaging, easy to navigate, informative with a call to action to purchase.  Loyal customers who return to your site are worth their weight in gold!

 

Do you have a healthy working capital?

Finally, a healthy working capital is essential not just for growth but for the day-to-day operations of running a business.  Even as you start to see your business develop, you must keep a scarcity mindset with cash and make sure you have some reserves for when something goes wrong. This has caused thousands of start-ups to fail as they hit unexpected turbulence and had no contingency in place.

In today’s global economy, there is a lot of uncertainty so there has never been a more important time to maximise liquidity to meet short term obligations and avoid going bust.  Not to mention, flexibility is key when a business is looking to expand and without enough working capital a business can lose this flexibility.

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BITCOIN COMES OF AGE

Katharine Wooller, Managing Director, UK and Eire, Dacxi

 

The Bitcoin halving event, which occurred on the 11th May, has been a watershed moment for the industry.   It has been a deafening theme for crypto narrative in recent months, and more recently has caught the eye of professional investors and conventional media alike, with some predicting it will be the catalyst for a substantial boom.   It appears bitcoin, finally, has a hard-won place in the mainstream.

 

Halving: In a nutshell

Bitcoin has a key feature; there are a fixed amount available, and, crucially it has a pre-programmed supply reduction built in.  The miners, who maintain the bitcoin network, validate transactions and add them to the blockchain when they are verified.  They do this at considerable electrical and computing cost and thus are paid in bitcoin. Periodically, the reward for doing so halves.  In the past this supply reduction, which previously occurred in 2012 and 2016, has coincided with a strong run-up in its price.

 

All grown-up

Bitcoin has now been in existence more than ten years and has survived the doubters, the scammers, the hackers, government attempts to quash it, and along the way it has given rise to new innovations using the blockchain technology that underpins it.  To overstate this amazing “survive and thrive feat” as well as the innovation it represents would be difficult.  Bitcoin, conceptually, has exceeded expectations.  Alas the 5,000+ crypto currencies that have sprung up alongside it include the good, the bad, and so very ugly.  Nearly all of these should fall away as Bitcoin dominates; at time of writing it is 67% of daily traded volumes.  Understandably, there is a very short list of 3 what we call blue-chip coins (LTC, BTC, ETH) that the institutional investors have shown interest in.

 

Solving some our largest problems

There is a clear appeal of digital currencies to the cashless internet economy based, including 24/7 price transparency that is available, cross border usage, divisibility to many decimal places, as well as third party oversight and controls. Bitcoin has been on a roller coaster ride over the last two years and has held its value throughout the current dramas and even increased in value as governments have stimulated their economies on a massive scale via printing cash endlessly to avert a market meltdown.  This is likely to create a massive inflationary environment into the future and sets the stage for Bitcoin to make its next move upwards after stocks and real estate prepare to reset valuations and attractiveness.

 

A new gold?

A lot of the dialogue around bitcoin talks about an improved version of gold, as a medium to convey value.  Improved by virtue of the technology being quicker, and cheaper to both store and move. Indeed, a recent transaction of $1.1bn worth of bitcoin, by bitfinex, cost $84.  Unsurprisingly this has caught the imagination of the financial infrastructure industry.  Some market commentators postulate a 10x increase in prices in the next 12 months, based on a few % of the global appetite for gold switching to crypto, with bitcoin being the heir apparent.

 

Diversification: Now

For the industry as a whole, it is great news that bitcoin is now demonstrably decoupled from traditional markets.    It is apparent that the price of Bitcoin is outside the traditional assets’ ecosystem, and the market is determined by a new set of criteria.  Bitcoin now has the crucial “social proof” that it cannot be altered by external forces, no matter how powerful, bringing much joy to the libertarians and retail investors alike.  Indeed, google searches for ‘bitcoin halving’ hit an all-time high in the late April, suggesting firm interest from newbies.  Further, the quality of exchanges available to both retail and institutional investors has improved substantially in recent years, providing a much-needed ease of entry into the market.

 

Professional Investors

Indeed, leviathan investors, such as Paul Tudor Jones, coming out in praise of bitcoin, as a viable hedge against inflation, saw bitcoin enter – unexpectedly – stage left to a much broader financial audience.  Bitcoin is viewed as what gold was in the 1970s, thus driving increasing interest from his fellow baby boomer cohort. Indeed, Dacxi, a digital exchange focusing on educating retail investors, saw some of its busiest weeks in the run up to halving.  The addition of global pandemic and imminent worldwide recession has been the perfect storm for the world to crave safe new assets.  Crypto is firmly out of the niche and into the zeitgeist.

 

What’s next

In my opinion, crypto has reached critical mass in terms of adoption. There’s no going back.  I was delighted to wake up in London on the 12th May and see the BBC reporting on halving – it doesn’t get much more mainstream than that!

As digital currencies become the increasingly dominant technology, anyone with an interest in markets and investing would be well placed to educate themselves on this seemingly unstoppable asset class.  With the recent momentum gained from the halving, crypto is likely to be a broader theme of daily life for decades to come.

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