AI is a road to customer success—but banks need to create guardrails too

Register now

By Olaf Tennhardt, Principal, Deloitte Consulting LLP, and Hux by Deloitte Digital Financial Services lead

Picture it. A customer receives a weekly email from their bank sent on an exact time and day of their choosing and includes the three data points this customer values most: their balance, weekly spending analysis, and savings projection. The email includes ads tailored to that customer’s browsing choices, or appears completely free of ads—again, depending on what the customer chooses. Unless the bank senses truly unusual activity on this customer’s account, that’s the only time each week that the customer will receive a notice from the bank—and that’s just the way they like it.

Customers today yearn for a personalized human experience tailored to their needs, wants, and expectations – whether they are in your branch, dialing into your call center, or contacting you over social media. Advanced technologies can help banks create such experiences. While the road to get there is more challenging than ever, it’s also more achievable than ever before.

Simply by being an institution’s client, customers are giving up a lot of personal information about themselves that they assume will be used to curate their experiences. But often, it isn’t. Banks often lack the capabilities to gather the reams of customer data and make sense of it to provide the tailored, human experience that they seek. To create relevant, customer experiences that can lead to lasting relationships, banks should consider deploying artificial intelligence and machine learning. These technologies can help to collate and understand customer data and determine the right connection point and engagement along each unique customer journey. The right insights can help banks turn their data into competitive advantage: the more human the customer experience, the happier the customer.

But with rapidly advancing technologies comes the inevitable risks, especially around security and regulation. As financial institutions consider AI, advanced analytics, and machine learning, it’s crucial that they prepare to navigate their ethical, legal and technical demands in tandem. The regulatory challenges that are emerging can’t be ignored. Cybersecurity risks have never been greater—and while customers are willing to give up their data in exchange for a better experience, they demand absolute privacy and security. A loss of trust can harm a bank’s reputation or shatter a customer relationship, sending them elsewhere.

The regulatory environment is also shifting, driven by political change, new social norms and behaviors, and rapid technological advances. These are distilled into the regulatory pressures that banks are facing, and the rapid pace of change means that governments and institutions need to think deeply about the rules and regulations required to use data safely and ethically. Seeing the risks ahead, government entities around the world have begun to address these challenges with new regulations. The General Data Protection Regulation act of 2016 changed the landscape for data governance and privacy. Other regulatory measures, including the California Consumer Privacy Act and the European Commission’s ethical guidelines for “trustworthy AI,” include provisions for security and data governance as well as transparency and non-discriminatory practices.

For banks, these guidelines and regulations are a roadmap to maintaining their customers’ trust in this era. But it’s just the beginning. The right internal process can also help banks navigate these challenges and maintain customers’ trust, including:

Own your data. Data should be a bank’s core competency: they should own it and maintain it behind their own firewall or cloud. With this, they’ll own key insight on customer data trails and an awareness on how each customer would like their data to be shared and used.

Own your decisioning. Use AI and machine learning to help identify the best way and time to engage with each customer, which can create a more optimized experience and outcome.

Own the delivery. Connect the processes across your ecosystem to create effective omnichannel experiences trusted by customers.

Your customers are humans first. They want to feel valued, appreciated, and safe. With AI and machine learning, coupled with regulation and a high value placed on data privacy, your bank can give customers that experience—and with an eye on security and innovation, keep them for years to come.

For reprint and licensing requests for this article, click here.
Banking Artificial intelligence Partner Insights by Deloitte