We live in an incredible, and incredibly connected, world with nearly half the population now online – and there is no turning back. The estimated 8.4 billion connected devices through the internet of things combine with advances in artificial intelligence (AI) and other innovation to deliver personalized payments. For the millions of digital natives, practically […]
Bank Innovation
As part of an overall digitization effort, BNP Paribas Group has allocated $ 3 billion to its tech research and development efforts this year. Its subsidiary, BNP Paribas Securities Services — a global custodian and securities services provider &8212; received a third of that sum in order to explore emerging technologies, such as #blockchain, AI, and […]
Bank Innovation
INV #Fintech, the sister accelerator to this site, announced its #third cohort of #startups today. The five companies were chosen from among a wide array of applications from across the globe. Here are the five companies of #Class 3 of INV Fintech: CoverHero is an intelligent insurance roboadvisor that helps users manage, understand, and buy […]
Bank Innovation
Mobile wallets may not have won over consumers (yet), but as anyone that’s recently visited a #Starbucks could tell you, QR #codes certainly have. That’s why #Visa is taking a closer look at the payment method, according to Jim McCarthy, executive vice president, innovation and strategic partnerships. “The QR codes allow us to remove not […]
Bank Innovation
The volatility of the #cryptocurrency #bitcoin is well-documented, but its cousin #ether—the currency traded on the Ethereum #blockchain(s)—is considered to be somewhat steadier. Ether’s value has been steadily increasing for months now, which is why it was such a shock to cryptocurrency investors when the currency “crashed” for a short time yesterday, plunging from about […]
Bank Innovation
#Banks #should approach points of digital friction in the same way e-commerce giants do, if they want to hold onto their customers. As noted in recent surveys, a single point of friction is all it takes for consumers to abandon a digital banking product—and thus, the bank itself. This means banks need to start taking […]
Bank Innovation
#PayPal certainly isn’t stalling its innovations for customers. The company is continuing to expand its roster of new features with the launch of instant bank transfers for Visa and Mastercard users, announced today. The service will go live for all users next month, and will cost $ 0.25 per transaction–cheaper than competitor services, like Square. It […]
Bank Innovation
In my first blog of this series on our latest UK banking consumer survey—Beyond Digital—I explained why there’s still plenty of life in the bank branch, since even younger #customers still value human interaction. In this second post, I look at our findings on a much newer and more virtual channel to market: #robo-advice—the new generation of automated financial advice services powered by artificial intelligence (AI).
#Banks across the world are continuing to invest heavily in robo-advisery services, seeing them as a way to deliver personally tailored financial information and guidance at high scale and relatively low marginal cost. The headline findings from our study suggest that this investment is justified, with fully two-thirds of all UK customers and 74 percent of millennials saying they’d be willing to receive entirely computer-generated advice on relatively simple decisions such as which type of bank account to #open (see Figure 1).
Interestingly, an even higher proportion of consumers—74 percent overall, rising to 79 percent of millennials—say they’re willing to receive robo-advice on more complex issues such as what investments they should make. And as Figure 2 shows, when asked why they’d be happy to accept advice from a machine instead of a human, they point mainly to benefits around speed and convenience, cost, and impartiality.
A deeper analysis reveals further significant insights. For example, while 25 percent of all consumers say robo-advisers’ greater impartiality gives them an advantage over their human counterparts, the proportion believing this rises to almost one-third among OAPs—suggesting older consumers are more sceptical about the objectivity of human advisers. And our findings that only 19 percent of consumers think computers are less likely to make mistakes, and that just 13 percent believe their data would be more secure than with a human, suggest the overwhelming majority have limited trust in robo-advisers’ decision making and security.
Our study also indicates that there are some areas of financial advice where consumers feel human interactions have yet to be fully translated into the available technologies. As Figure 3 shows, almost two-thirds think it’s important to have human advisers on hand to provide advice on large, long-term products such as mortgages. In contrast, fewer than half feel they need human guidance on using their bank’s online and mobile services.
And in terms of what they value about speaking to a human representative, consumers rate the ability to ask direct questions and seek personalised advice as the top advantage, followed by being able to get what they need faster, and then humans’ better ability to explain complex issues. Interestingly, having a representative who knows the consumer well ranks very low as a benefit.
So, what does all this means for banks’ robo-advice strategies and investments? Combine these findings with those I presented in my first blog—including the fact that millennials are the heaviest users of branches, tapering down to OAPs as the lightest—and I believe a clear message emerges: Winning and retaining customers in the future will depend critically on striking the right balance between human-delivered and AI-driven services.
Put simply, banks need to recognise that for many consumers—including younger ones—the shift towards computer-generated services cannot succeed if it’s at the expense of access to human service at their local bank branch. And automation must be used to not only make banks work smarter, but also to improve and personalise the customer experience.
It follows that the next challenge for many banks is to reassure customers that they can receive the same level of service from a robo-adviser, and pull together the various threads of information they hold on their customers to create a personalised yet secure service. Consumers’ readiness to accept robo-advice for some financial decisions means that banks developing these services are pushing at an open door. But this doesn’t mean they can afford to shut off their customers’ access to interactions with real humans.
The post Customers are open to robo-advice—with a few conditions appeared first on Accenture Banking Blog.
It’s been less than a year since Goldman Sachs unveiled its #marketplace #lending arm, Marcus. How has the platform been doing so far? Marcus has lent more than $ 1 billion since the launch, and plans to “cross” the $ 2 billion threshold by the end of the year, Chief Executive Lloyd Blankfein said in an interview […]
Bank Innovation
#Klarna, Swedish #payments firm, is looking into the person to person payments #space, as the company secured a #banking #license earlier today, Bank Innovation has learned. Klarna has been granted a full banking license by the Swedish Financial Supervisory Authority, according to a company announcement. The move instantly turned Klarna into one of “Europe’s largest […]
Bank Innovation
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