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In today’s experience economy, customers expect personalized and customized experiences from their banks. To meet these demands, it is essential that Australian banks remain innovative and customer-focused through the adoption of new technologies, writes Publicis Sapient CEO Tales Lopes.
According to Salesforce’s State of the Connected Customer 2022 survey, 73% of customers say they expect companies to understand their unique needs and expectations.
In the banking landscape today, customers expect banks to know and anticipate their needs, engage them based on life events, life stages and lifestyles, as well as provide a seamless journey to transactions and services.
New technologies and innovative techniques have emerged to help financial institutions use data and analytics to offer hyper-personalization by understanding the digital preferences and footprint of their customers.
This is even more relevant today as Australia’s financial landscape faces challenges related to rising interest rates and customers switching from fixed term mortgages. Banks and financial institutions must proactively identify and support customers at risk of financial distress and build long-term relationships, loyalty and a stable and satisfied customer base.
Hyper-personalization, advanced artificial intelligence (AI) algorithms and robotic process automation (RPA) are key to addressing changing customer needs and financial pressures.
The Reserve Bank of Australia (RBA) is raising interest rates to tame inflation and maintain economic stability. From May 2023 the cash rate is 3.85%, the eleventh rate increase in 12 months. This increase is putting a lot of financial pressure on households with variable rate mortgages amid further stress from rising living costs.
In addition, the RBA predicts that up to 800,000 fixed-rate home loan contracts will end in 2023, and borrowers with expiring fixed-rate loans face a big increase in their repayments.
Banks can play a proactive and key role in preventing widespread distress and offering their customers a lifeline in this environment. Using AI-driven analytics and real-time data, they can identify at-risk customers early and offer targeted support. By analyzing customer data, AI algorithms can identify patterns indicating potential difficulties, such as repayment problems or a drop in income, allowing banks to provide tailored support such as revised repayment plans or financial advice.
Financial consulting
As personalization becomes the norm, customers increasingly expect help managing their finances, especially during times of financial uncertainty.
For example, when Covid-19 caused widespread financial difficulties, one of the UK’s three largest banks, in partnership with Publicis Sapient, focused on supporting customers in financial difficulties and providing them with the necessary tools to cope with these challenging situations. times.
By combining customer data available within the bank with data obtained from credit bureaus, the bank was able to proactively identify customers who might need help and offer them advice and support. Red flags included patterns such as a steady decline in credit scores, consistent use of the limit on revolving accounts (credit cards and overdrafts), and missed payments on accounts held inside and outside the bank.
For these identified customers, when they logged into the digital channels, signposts were displayed at the appropriate locations to guide them down a path specifically designed to help those in financial distress. As part of this journey, customers received personalized treatment strategies and payment plans tailored to their specific circumstances.
In addition, the bank offered tailored credit coaching that was tailored to the extent of mapping out the steps customers should take to improve their credit profile.
The case described above had a significant impact on the lives of customers, involving almost a million customers. The bank provided treatment plans to around 10,000 customers every month through online channels.
Compliance regulations
Integrating artificial intelligence and automation into customer service channels makes it easier to identify and assist customers. In addition, these innovations will help banks comply with regulatory requirements with an emphasis on responsible lending practices and proactive support in times of difficulty.
By investing in hyper-personalization, artificial intelligence and automation, banks demonstrate commitment to these standards and improve credit risk management and customer base stability.
Retraining of personnel
Finally, the implementation of these technologies also redefines the role of bank employees. Employees will need to be retrained to take advantage of the potential of AI and RPA. Equipping employees with the necessary knowledge and skills will enable them to provide high-quality and empathetic customer support, while AI drives data analysis.
Tales Lopes is the lead partner of Publicis Sapient’s financial services division in Australia.
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