In the aftermath of financial crises, small and mid-sized banks are grappling with a trust deficit among their customers. This erosion of trust is manifested in the continuous outflow of deposits from smaller institutions to their larger counterparts. The fall of Silicon Valley Bank earlier this year raised concerns among customers, underscoring the critical importance of rebuilding trust for the long-term success of small and mid-sized banks. Moreover, the escalating complexity of the industry’s operating and regulatory environment has led to a less customer-obsessed approach within many institutions.
However, Artificial Intelligence (AI) and Machine Learning (ML), offer banks the opportunity to address these challenges head-on by enhancing operational efficiencies, automating as much as possible, and freeing up humans to focus on cultivating loyal customer relationships. With a staggering 77% of bankers believing that AI will be the differentiating factor between successful and failing banks, it’s evident that AI is rapidly becoming an integral part of the financial services industry toolkit.
Empowering customer frontline teams
Frontline employees in the financial services sector face mounting challenges. Qualtrics data found a striking 27% of them contemplate quitting their jobs multiple times a month, while 47% report an increase in their workloads. The convergence of regulatory demands, intricate processes, and elevated customer expectations has contributed to heightened stress levels within frontline teams. Sustained stress and burnout can translate into a diminished customer experience.
AI can step in to streamline core banking operational processes by eliminating tedious paperwork and reducing turnaround times. Through the automation of routine tasks and the optimisation of resource-intensive processes, frontline employees can become more efficient. Consequently, they can provide customers with a smoother, faster, and more convenient experience. With AI capabilities like emotion, intent and even effort enrichments, AI can create a more unique, personalized experience for the customer. This increased efficiency and personalised approach not only alleviates stress among frontline teams but also enables them to deliver more empathetic customer service.
Solving customer problems and building trust
AI holds the potential to help small and mid-sized banks swiftly identify customer issues and trends. These technologies can automate workflows and prioritise problems that necessitate human intervention. By analyzing the language and emotions conveyed in customer inquiries, banks can offer a personalised experience tailored to each customer’s needs, context, and history.
AI also excels in connecting seemingly unrelated experiences that are, in reality, part of the same customer journey. For example, a customer’s inability to complete a task digitally often leads to contact centre interactions. The ability to understand and bridge the gap between digital and contact center feedback – and dig into customer comments and conversations at scale – empowers banks to address the root cause of issues with speed and agility.
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AI can also optimise customer-facing messaging and delivery mechanisms, ensuring that tailored messages reach customers through their preferred channels. This level of personalisation at scale builds affinity and trust, strengthens customer relationships, and positions the bank as a reliable financial partner.
Furthermore, AI enables banks to create individualised, contextual, and effortless journeys within their banking ecosystems—a feature often lacking in today’s banking landscape. Leveraging AI to make data-driven decisions, small and mid-sized banks can demonstrate their commitment to effectively meeting customer needs, ultimately rebuilding trust.
The AI Opportunity Ahead
Small and mid-sized banks are presented with a significant opportunity to rebuild customer trust and gain a competitive edge by embracing an AI-powered customer experience approach. By leveraging AI technology to support frontline employees, understand and manage customer issues at scale, and build lasting customer relationships, these banks can not only meet but exceed customer expectations, positioning themselves for success regardless of economic circumstances. As the financial services landscape continues to evolve, AI stands as a beacon of hope for smaller institutions to regain their initiative, rebuild customer trust, and deliver outstanding business outcomes.