How are banks automating or failing to automate?

This is part two of a series looking at banking automation. Click here for part one

Banks are typically seen as traditional organizations; however, many are embracing automation as a way to both improve efficiency and meet customer needs.

On the efficiency side, Jean-Pierre Lacroix, president and founder of Shikatani Lacroix Design, said in an email interview that banks are using a variety of automation tools as part of a broader digital transformation including "a move to paperless to back-office automation leveraging AI to reduce the steps in the decision-making process while reducing risk."

Banks are also deploying smarter ATMs that can provide more banking services on the branch side.

On the online side, Lacroix said banks are using AI and apps for, "automating reminders, assisting customers in managing their funds to sending reminders on payments and account balances. Mobile automation will evolve into virtual digital assistants that act as advisors and mentors, allowing customers to feel in control of their finances."

EJ Kritz, EVP for apc, identifies automation as occurring particularly within branches as well, but also in call centers.

"Within branches, banks are looking for ways to bypass the natural shortcomings of the big core providers to streamline the most basic transactions, leaving extra room for meaningful conversation," Kritz said in an email interview. "In the call center, it's all about attempting to help the customers through the automated cue while moving others to live agents as quickly and painlessly as possible."

Kritz also identifies the home loan process and fraud prevent and resolution as potential areas for growth with automation.

Despite these efforts, banks are still struggling with key pain points in this automation journey.

Lacroix identified three pain points:

• Customer security concerns.
• Acceptance of facial recognition.
• Fear of AI.

On the AI front, Lacroix said customers are particularly concerned about AI making biased decisions that impact their financial lives.

"Recent issues in the use of artificial intelligence in loan or insurance acceptance has raised concerns regarding the unbiased value of this technology in making decisions that impacts consumer's financial lives," Lacroix said. "Until processes and government guidelines are put in place to ensure the objectivity of the programs in addition to fewer concerns raised by many leaders, the real value of automation supported by Ai decision making tools will not happen in the near foreseeable future."

Kritz, on the other hand, said the top factor holding back banks in this regard are large core operating providers, which he believes holds back innovation.

"What's sad is, we don't even need to name them… everyone in banking knows the culprits and there's little that can be done. These providers are holding banks hostage under archaic 20-plus year old systems that are both difficult and expensive to upgrade or replace," Kritz said. "It's far easier for a bank to say their systems are 'good enough' than to move on to tools that will truly delight customers. Banking systems need to be as intuitive as shopping on Amazon. Instead, it takes two weeks to teach a teller how to deposit a check."

However, when looking at automation in general, banks need to remember customers still want the human touch, especially when it comes to having contact with knowledgeable bankers.

"Banks talk a lot of being customer-centric but if you follow the money, where banks invest, it's not about being customer-centric but cost containment focused. I believe banks need to pivot to respond to the need of customers who want to have access to knowledgeable staff," Lacroix said. "This is important as the industry players, due to regulations and a fear of risk, are very undifferentiated. Providing automation that empowers the front-line staff will go a long way in securing customer loyalty. Ultimately, the pitfall is investing in short term automation at the cost of long-term customer benefits."

Kritz said that while banks are automating, they should also reinvent hiring protocols to bring on bankers who can address customer's needs, especially in regards to financial advice.

"Banks need to reconsider the persona of the next-generation banker to be an individual naturally interested in relationships while also being adept at new technologies," Kritz said. "Despite staffing, slapping new tech on an old model won't bring forth desired results. Banks must train employees to help them understand where the tech falls within existing customer experience practices while also perfecting branch choreography."

Both Kritz and Lacroix will be speaking on panels at the jointly held Interactive Customer Experience Summit and Bank Customer Experience Summit in Charlotte, North Carolina from Sept. 11 to 13. Click here to register for the joint event. Use the code AMCEDIT20 for 20% at checkout.