Breaking the Barriers - From Digitization to use of AI & RPA in Banks

Banking has seen a drastic change over last decade, where banks have completely changed the way customers used to bank 10 years back. Back then, Banking used to be mostly cash dependent, customers were used to transact in cash, cheques and demand drafts, and Branch visits were inevitable to perform even a transaction.

However, over past few years, Banking has changed a lot, not only in terms of how customers bank but also how bank is offering their services. Although Customers are moving towards digital transactions, Banks over the past few years have kept pace with the customer demands, and have provided all the innovative ways to bank for the customers ensuring the wall of safety and trust within the customer does not get a hit. Banks have seen a shift from cash and Branch based transactions to Customer transacting over the Internet, Mobile Phones, Tablets, and on the Smart Wearables, sitting at the comfort of their homes. From sending money to an overseas friend to depositing a cheque to the bank, all these services customers are enjoying sitting at the comfort of their homes. To achieve this, Digitization has played a key role.

Digital payments, once born out of convenience, have become a necessity for some. Banks have gone the Digital way, where they are encouraging the customers to Bank Digitally and also shaping and scaling up their products and services to support the digital transactions, where services such as Onboarding, Origination of new accounts, Digital Lending services have been turned completely digital. In this Journey, FinTechs have played a major pivotal role in this transformation journey of the bank providing the technological solutions needed by the banks to go on the path of the digital transformation. The FinTechs have the technological solutions, while banks have the customer base. Bringing the two together is generating win-win relationships.

Also, as a rule of the nature, change is inevitable and the only constant, as commonly mentioned, Banks as well as banking also will have to keep changing in the coming future at the same pace or maybe even faster considering the current scenario. During Covid times, Banks must redesign and reimagine the Customer Experience. The way the customer is going to Bank in the coming times is going to be completely different. At one hand Banks are going Digital, and pushing for more digital transactions, on the other hand there is a dire need for the banks to retain the trust, companionship and interpersonal interactions with their customers.

Having said that, although there is a big push for increase in Digital Transactions, banks should think twice before giving up entirely on physical assets and experimenting with digital-only models. Banks should look up a strategy to marry the online and offline worlds in a way that will create a more human customer experience keeping the convenience of digital interfaces and the satisfaction of interpersonal interactions. A Phygital strategy (mix of Physical and Digital) could give them the edge in this new normal.

Keeping the Digital strategy in mind, apart from the digital products and services which bank has to offer, one of the key differentiators would be the increased use of Chat Bots and Analytics in Banking. Increased usage of chatbots have been seen in the recent times, which is a key catalyst to resolve customer queries 24/7, without any human intervention, which is the need of the hour considering the current situation. Chatbot capability can vary from answering a simple customer query, to performing a complex transaction. Chatbots today can guide a customer on how to perform a transaction or to perform a transaction on the customer’s behalf keeping all the security aspects in place. Chatbots today are capable of providing insights to the customer with the use of Analytics, AI & Machine Learning, Where the Banking system can analyze the customer spending and earning patterns and provide insightful ideas to the customer, and hence improving their overall journey with the Bank. Chatbots can be a very good cross sell platform to the Bank, where bank can use the chat engine capability to upsell their own products and services. Chatbots have also evolved over a period of last few years, where few services/queries can be completely resolved by the bots, whereas few might require a human intervention, and the bots transfer the request to a representative, where he is provided with the background on what the customer was enquiring, which helps the executive to assist the customer in a better way.

The way the Chat bots have the capability to resolve customer queries, is unimaginable, with the correct blend of Analytics, Artificial Intelligence and Machine Learning.

Banks must also look up to the Physical strategy, where the interpersonal interactions with the customer does not get lost. To achieve this, Robotic Process Automation or RPA will play a major role to achieve this milestone. With the use of RPA, Bank will be able to cope up with the increased workload with the reduced staff. RPA can assist bank in a large way to reduce the burden of the redundant work, which can be automated, and can be used to perform day to day activities at the branch with the reduced bank personnel. Robots can be used to even greet and meet person at the Branches and perform transactions like, depositing cash, deposit of cheques, opening of an Account, or even starting a Loan Application. A right blend of RPA, Analytics and machine learning can achieve wonders in terms of mitigating operational challenges of the Bank. Banks are adapting to this use of AI/RPA in their banking journey and increasing the overall customer experience.

To summarize, Banking has changed over the past few years, and Banks in collaboration and assistance with FinTechs have done a commendable job to keep up with the changing world and quenching the thirst of tech hungry customers. However, Banking is further to see an unprecedented change in the coming couple of years, and to keep up with the changing world, the combination of bank and FinTechs will have to continue to come up with innovative ideas to keep up with the change and provide excellent customer experience and excel. Are we ready for the future of the Banking?