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Balancing human and digital: Banks on the high wire

  • Posted on June 1, 2023
  • Estimated reading time 4 minutes
Balancing human and digital: Banks

The pressure on banks to be more responsive to customers is intensifying. The recent challenge for US banks has been to be able to handle market disruption effectively, while growing the deposit base and keeping customers.

Some banks have gone deeper into digital, with increased automation and fewer people on the frontline. Branch numbers decline, self-service rises and digital engagement becomes the norm. But you sometimes need the skills of a detective to find a telephone number on a web site to speak to a human being about the advice you need.

For other banks, there is recognition that people are key to creating customer trust but the cost of doing so is just too great. So, banks adopt a middle road, giving just enough support to those at the cutting-edge of customer engagement and hope that with minimum investment in technology and training, their people will somehow be able to handle the internal complexity placed before them every day – and still develop great customer relationships. Amazingly, sometimes they do.

Meanwhile, other customers get lost in call center options, turn up for branch interviews (booked online) where no one is available to see them, are offered products they’ve already bought from a competitor, cannot find anyone to speak to about the low savings rates they’re on (because they aren’t rich enough to get through to an advisor) or get the help they need as they spiral into debt (while the bank automatically charges overdraft fees).

Is there a way out of this?

Can banks intelligently blend human and digital to create personalized interactions, moments that matter, conversations with context? Are customers simply lost in a self-service, digital labyrinth that makes money for the bank but feels like an impersonal institution, devoid of emotion – great for those smart enough to navigate the system, but a nightmare for those who cannot? Is the best option always too expensive? In this high wire act of balancing human and digital interaction, what happens to the customer if the bank slips up?

We recently undertook research into this area, including a number of 1:1 banker interviews. This is what we found:

Human engagement is vital to build customer trust: Over half (55%) of all survey respondents agreed. Responses from MEA (64%) and Europe (59%) were even higher.

Channel strategy is still populated by people: When asked ‘Where do you regularly put customers in touch with a human being?’, the top two areas were Branch (76%) and Call Centre (70%), followed by Relationship Manager (RM, 61%), Financial Advisor (52%), Wealth Manager (43%) and Investment Banker (33%).

Bank staff are under-resourced and facing conflicting demands from the business: The biggest problem for customer-facing employees was too much focus on product targets (18%), conflicting demands from the business and lack of investment (staff training, development and incentives), both at 14%. Lack of staff investment was the top issue in Asia (29%).

If you don’t measure it, you can’t manage it: 49% did not know how much (or how little) their bank invested in staff as a percentage of overall revenues.

Customer-facing staff face daily complexity: On average, staff have to deal with 5-9 major applications every day to do their job (39%). One in five in MEA (17%) and one in four in Asia (24%) had to deal with 20+ applications daily.

The top challenge for blending human and digital was IT integration issues (33%): Banks want easier processes (33%) and greater personalization (29%) to engage better with customers.

One of the key themes was the continued lack of employee investment in technology, training and development. It’s a cliché, but supporting your people is vital if you want to develop that rare ingredient: customer trust.

You’re probably wondering how generative AI (GenAI) plays into all this. I’d recommend you read a recent blog post by my colleague, Mark Ghose, on this theme and particularly the role of GenAI as co-pilot to augment human engagement. The scenarios he paints are being deployed today.

Now is the time for banks to examine alternative ways to be more responsive and increase customer trust. There does not need to be a descent into a digital spiral that is devoid of emotion. The value of the human touch cannot be underestimated in the customer journey. The promise is deeper customer engagement and higher revenue per customer, while operating at substantially lower costs, closer to that of the fintechs and neobanks. Being truly human in your banking interactions is the basis of real differentiation.

Creating a bank that’s digital by design, yet truly human, is challenging but achievable. Employees want it. Customers demand it. If you want to win back customer trust and keep your balance on the high wire, you really have little choice.

If you want to find out more, Avanade has set up a webinar on this topic with Qorus, a global financial services association, including a panel of bankers sharing their experience in this area. The report will be available to all attendees. Click here to register. Alternatively, visit our Balance in Banking site.


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