Where AI meets human: getting the mix right in digital banking solutions

By Ross Watts, Chief Customer Officer

Ross Watts 1

AI is making a huge difference in digital banking solutions; and beyond that, in consumers’ everyday lives. For countless businesses worldwide, AI is fundamental to their operations.

Yet there are still people in banking who see AI as a kind of “science fiction”, according to Doug MacKenzie from Fintech & Finance News. Earlier this year, I spoke about AI at a Fintech & Finance News Virtual Arena moderated by Doug, alongside TSB’s director of analysis and design, Mike Gamble.

For TSB too, AI is far from sci-fi - it’s a daily reality. Mike outlined their plans for the TSB Smart Agent, a bot that’s already conducted millions of conversations with customers since it launched in 2020.


The human/AI balance

One major misconception in our industry is that AI-based digital banking solutions are designed to take humans out of the equation. It’s just not true. There will always be a need for the human element. One does not mean the lack of the other.

Mike told us how TSB has close to 70% of their customers digitally engaged, with about 90% of all of transactions carried out by customers themselves. As a mid-sized, UK high-street bank with about 5 million customers, they have a big branch network and lots of telephony, but their focus is currently on driving banking technology forward.

They’re constantly re-educating TSB Smart Agent. One day it will play the role of personal concierge: answering customers’ questions, making intelligent suggestions, embellishing and enriching conversations.


But this is the important bit

TSB aren’t forgetting that they’re still a traditional high street branch, and that the human element of banking is key. How they connect the digital world with the human world is absolutely front and centre - it will never be just standalone AI.

As Mike says, AI is very good at dealing with everyday transactions, identifying when customers are in financial difficulty, or when they’re vulnerable, and where they are. But at that point, the system connects them in real time to a human being.

This came to the fore in COVID. If TSB customers took a three-month holiday on their mortgage, personal loan or credit card, it was essential that they were able to speak to a human being to help them through that and reassure them.

Another example is when a TSB customer suspects a fraudulent transaction, or wants to restructure their debt. The bot ushers them through a series of steps, but then hands the interaction over to a person.

Hand of businessman touching hand artificial intelligence meaning technology connection go to future

“We see that as the most powerful development in learning how to use this channel, and banking technology, going forward,” Mike says.


Ensuring an easy transition

Many large financial institutions are realising that it’s almost impossible to handle the amount of transactional data going through their legacy systems, using anything other than an AI-based front-end solution.

We do see some tension, sometimes, when we implement our DiVA solution into processing centres. If colleagues have done things a certain way for a long time, they don’t necessarily want to work with the AI solution.


Usually though, the cultural change happens when we talk to them about the benefits to the customer. While they might be fearful of the impact of AI on them personally, in their role, they are generally very passionate about helping customers. This is why it’s critical to get the buy-in of colleagues who are going to be working with AI, so it can be implemented really seamlessly.


How AI improves cost-to-income ratio

Every major bank is looking to invest more in their technology and find efficiencies that are going to enable them to do that. Our conversations with clients aren’t so much about cost-cutting, as about removing low-value, manual handling processes. It’s about speeding up the capture of information that will provide insight to the business to make decisions more efficiently and accurately.


AI plays a really important role in that. It’s speeding up time to approval, increasing the number of applications that can be handled and reducing re-work and errors. In cost-to-income terms, you end up with a happier customer at the end of the process, and as Mike said, “if you have an efficient end-to-end customer journey, the cost kind of looks after itself.” For TSB, that can be something as simple as improving the change-of-address process for customers.


In lending, you’ve also got a happier introducer which is important in the United Kingdom where 70% of the market is broker introduced. Brokers love AI, and if you’ve got happy brokers, you’ve got someone choosing you over a competitor. You also have happy colleagues - people in the processing centres don’t have a customer or a broker breathing down their neck for information because AI is keeping everyone updated, making sure that any gaps in information are being filled, and notifications are sent.


In the AI/ML space, Sandstone Technology is best known for DiVA, a document processing solution that is speeding up mortgage application approvals exponentially for a range of UK banks and credit unions. Developed specifically for financial services, DiVA automates the document verification process to free up resources and dramatically reduce time spent manually handling documents in the mortgage application process.


Finally, as Mike beautifully described it – you’re leaving the moments of truth. AI is taking care of the difficult tasks, and, at the same time, creating a really efficient process and the “high-five” moments, to happen between staff and customers or brokers, human to human.

Click below to watch Fintech & Finance News Virtual Arena with Sandstone Technology on demand.

FinTech Finance

Article published October 2021 


Where AI meets human: getting the mix right in digital banking solutions

Posted by Sandstone Technology on Nov 23, 2021 11:14:49 PM
AI is making a huge difference in digital banking solutions; and beyond that, in consumers’ everyday lives. For countless businesses worldwide, AI is fundamental to their operations.

Topics: AI and Machine Learning, Digital Banking

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