In our rapidly changing world, filled with innovation and opportunity, one thing is clear: AI technology has evolved from a science fiction buzzword to an increasingly important part of our daily lives. The rapid adoption of AI has become an undoubted market accelerant.  Fuelling an innovation race that will have significant global ramifications across nations, industries, enterprises, and consumers. AI is making headlines, with debates ranging from it being dubbed the ‘greatest threat to mankind’ to those advocating for AI’s widespread benefits. The reality likely lies somewhere in between, but it undoubtedly brings uncertainty, especially to the world of finance and banking.

The Paradigm Shift: From Product-Centric to Customer-Centric Approach

The rise of AI technologies presents companies with new opportunities to add value for their customers. The financial services sector was already starting to shift their mindset, transitioning from a traditional ‘product-first’ approach to one that prioritises a customer-led approach. But this pivot is now gaining considerable momentum due to the rapid adoption of AI technology. While financial services have made efforts to innovate, there is still room for progress.  By harnessing the potential of AI, financial institutions can revolutionise customer experiences, enhance retention rates, and create a loyal customer base.To stay ahead of the game, financial institutions must position themselves to ride the disruptive wave of innovation.

Building Trust through AI Human-like Interactions

Trust is the cornerstone of successful financial services. Striking a balance between leveraging AI capabilities and maintaining authentic connections with customers is crucial. According to the findings of our recent Report “Mind the Gap”, trust has the most significant impact on customer behaviour . We firmly believe that establishing genuine emotional trust begins at the top of the pyramid, where customers perceive financial services organisations as being truly aligned with their interests and delivering what they truly need.

To uphold this trust, propositions and services must be frictionless, providing brilliant experiences that are seamless. Infrastructure plays a critical role in achieving this, ensuring safety, security, and timeliness, which becomes even more vital when customers engage with AI solutions for making financial decisions.

Anthropomorphic design in AI to build trust 

Anthropomorphic design, which emulates human behaviour and interaction, plays a pivotal role in building trust. Incorporating human-like design elements enables financial institutions to develop virtual assistants and chatbots that offer empathetic and responsive interactions. The AI can mirror social interactions including using emojis or animations to convey reactions, creating a more relatable and intuitive user experience.

Having virtual assistants with names, personalities, and conversational abilities can make interactions with customers feel more engaging and human-like. Bank of America’s virtual assistant, Erica, is a great example of this. Erica provides personalised financial guidance and assistance to customers, and giving the AI a name adds a human touch to the technology. This helps customers feel like they are talking to a financial advisor rather than a machine.

Capital One takes a slightly different approach with their assistant, Eno. Instead of a human figure with a name, their logo features a simple text bubble and a smiley face. This conveys a positive and happy image to customers, which can help put them at ease and make their interactions more enjoyable. Overall, virtual assistants with names and personalities can help make technology feel more approachable and friendly. This can lead to better customer experiences and more positive interactions.

How Far Should We Go in Mimicking Human Interactions?

An exceptional example of anthropomorphic design in banking is Mizuho Bank in Japan. They have implemented “Pepper,” a humanoid AI robot in select branches. Pepper engages customers through facial expressions, body language, and verbal cues, creating a more personalised and human-like banking experience. It greets customers, provides information, and engages in small talk, blurring the boundaries between technology and human interaction.

But, it begs the question: how human-like do we really want this technology to be? Sure, anthropomorphic design can enhance customer experiences and build trust, but there’s a fine line between creating a personalised experience and making customers feel uncomfortable. Why reinvent the wheel when a tried-and-true method may actually be the optimal path to success?

So, while AI technology definitely has its place in the banking world, it’s important for companies to consider their customers’ preferences and comfort levels. Ultimately, the goal should be to use technology to augment human interactions, not replace them entirely.

Where do we go from here? 

As financial institutions embrace the power of AI, a customer-centric mindset and a focus on trust-building are essential. Hyper-personalisation and anthropomorphic design offer exciting opportunities to enhance customer experiences and gain a competitive edge. When building new tools, financial services companies must prioritise a customer-driven approach. This involves gaining customer insights, building minimum viable products (MVPs), and continuously testing and iterating solutions with customers.

Thorough testing and experimentation are necessary to truly grasp customers’ requirements. This ensures the establishment of trust in AI solutions when making financial decisions. It is crucial to determine whether customers comprehend that they are interacting with a human-like technology and whether they feel comfortable utilising it in personal scenarios. Consequently, an important question arises: can replicating the “human touch” be deemed sufficient for customers, or will it eventually replace the authenticity of genuine human interaction? By leveraging these approaches, financial institutions can develop AI solutions that truly cater to their customers’ needs, build excellent customer experiences, drive widespread adoption, and foster long-term customer loyalty. 

Remember, AI in financial services is an ongoing journey, and putting the customer at the forefront of innovation will be key to success.

So, what do Financial Services need to do to get ready?

AI is a highly complex field that goes far beyond a simple decision-making tool. While scaling artificial intelligence can provide a significant competitive advantage, it requires more than just investing in cutting-edge technologies and algorithms. To truly extract value, current decision-making processes and operations need to be rewired. Additionally, investing in human and data capabilities is crucial to ensure the long-term success and sustainability of AI initiatives. Creating a data and AI strategy is a comprehensive process that cannot be achieved overnight. It involves focusing on the specific requirements of the business, identifying suitable data-driven solutions all while addressing customer needs.