One of the most significant impacts of COVID-19 on banks will be felt on credit management. With the stimulus and relief packages from the government that were available at the start of the pandemic beginning to disappear, banks will have to alleviate the financial strain, expected to escalate this year, on their customers.
Most enterprises, including banks, are primed to maximize every penny of profit from each customer. However, such an approach towards customers can lead to an adverse impact on reputational, regulatory issues, dissatisfaction, and the eventual loss of customers.
Practicing empathy, therefore, is important for all businesses. This was substantiated with a recent survey of 125 senior banking executives conducted globally by Accenture to find out how top banks delivered human touch to their customers.
The research revealed the group that comprised empathetic executives witnessed a 1.3% average revenue growth during 2020, which was 1.9 points higher than the other group at -0.6%.
Some of the leading banks are already meeting this challenge head-on by incorporating empathy in their strategy. For example, some are looking to offer more empathetic, personal services to their customers, by focusing on their bricks-and-mortar branches.
The challenge with this approach is the lack of scalability as bank branches have their limitations. Digital, on the other hand, offers immense scalability – although the flip side of this is the loss of human touch and the risk of commoditization. While empathy is a trait in all individuals, it is conspicuous by its absence in much of the technology infrastructure deployed by banks.
Infusing Empathy in Technology
Infusing empathy in client interactions can be achieved by leveraging technology that recognizes key moments in customers’ lives and activates actions to highlight them. The next level of AI solutions is integrating the human perspective also, which means fully considering and understanding this important human emotion called empathy.
AI and analytics, coupled with the customers’ growing preference to maximize digital channels offer an opportunity for banking technology leaders to deliver personalized experiences and services to individuals, and that too at scale.
Customers have a growing preference towards digital channels, and this provides opportunities for banking leaders to deliver personalized experiences to individuals. This coupled with technologies such as AI and analytics enable them to deliver hyper-personalization at scale.
By analyzing petabytes of data, intelligent solutions such as Natural Language Processing (NLP) and Machine Learning (ML) can gauge the emotional state of a customer, and suggest the best actions that can be adopted in real time. Such actions can play a big role in reinforcing customer loyalty and trust.
The Road to Empathetic Banking
The key parameter that differentiates empathetic banks from the rest is their capability to assimilate huge amounts of data, derive insights from it, and consequently engage with customers. Instead of getting customers to reach out through a specific channel, such banks offer them options based on their financial and emotional needs. While interacting, empathetic can banks tailor their messaging according to each individual customer’s emotional profile.
For a bank to provide an empathetic experience to its customers, it will have to adapt and modify its existing banking channels. It will have to accelerate its move to a solo, unified engagement model that enables an empathetic and consistent banking experience across channels.
There are four pillars that banks need to build in order to fulfill this vision. The first pillar involves translating customer inputs into empathetic actions by consolidating data from varied sources onto a real-time, unified platform.
The second pillar calls for ramping up contact centers with machine learning, chat, artificial intelligence, and other cutting-edge digital capabilities.
The third pillar entails leveraging technology such as text analytics and speech analytics, and voice recognition to garner in-depth insights into a customer’s emotions, irrespective of the touchpoints.
The fourth and final pillar calls for transforming existing bricks-and-mortar branches to include the aspect of empathy because although the contacts are low in volume, they are extremely important for customer experience.
By implementing technology that helps in striking the right balance between automation and people, and wrapping it with an effective organizational framework around it, banks can support each individual customer in the best possible way, thereby maximizing loyalty and enhancing their reputation.
The pandemic has set yet another ‘new normal’ — that of how empathetic an organization can become. Customers demand brands to be transparent and authentic rather than indifferent or inconsiderate. The path that banks choose from here on can turn their customers into brand loyalists. It will bode well if banks can transform their tech architectures for customers to rebuild trust and build loyalty.
Technology leaders in banks can maximize their digital platforms as the foundation for incorporating empathy metrics to offer a human touch to customers in the moments when it matters the most. This will eventually build valuable and lasting relationships with their customers while driving new revenue.
*Views expressed in this article are the personal opinion Suman Reddy Eadunuri, Managing director and country Head, Pegasystems.*