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A cornerstone of Singapore banks' digital transformation is the use of AI to enhance customer experience

IT'S NO secret that Singapore prides itself on being an early adopter of sophisticated technology to drive its global competitiveness. Its banking sector is a prime example, and is today by far the most advanced in the region in its use of new technology - offering mobile banking and the latest fintech solutions for both corporate and individual customers.

However, the industry is poised for further technological disruption in the coming years, as highlighted by Prime Minister Lee Hsien Loong during the recent May Day Rally. Our research indicates that 2018 is the year of intelligent connections, applying the latest technological developments to improve human and machine connections. Singapore banks will need to fully adopt digitalisation if they are to further cement their position on the regional and world stage. A solid cornerstone of digital transformation is to use artificial intelligence (AI) to improve and enhance the customer experience.

The future of customer experience

Customer experience is emerging as a differentiator in the banking industry, increasingly challenged by customers' changing expectations of products and services in today's digital age. According to Avaya and IDC research, consumers' top three criteria when deciding whom to do business with include high quality of service, ease of finding products, and timely delivery. Additionally, 55 per cent of respondents believe that the use of sub-optimal communication tools reduced an organisation's agility and flexibility. Leveraging AI will provide banks the ability to better understand their customers, provide personalised services, and create more efficient experiences, which ultimately increase customer loyalty; delivering the top three factors to attract and maintain loyal customers.

AI plays a major role in creating seamless, consistent and personalised customer experiences for banks and their customers across multiple touchpoints including the mobile app, website, chatbots, phone and in-person. While banks possess large amounts of customer data, uncovering actionable insight remains a challenge; AI quickly and efficiently learns from data to provide agents with relevant information in real-time, enabling intuitive, hyper-personalised interaction with customers. This allows a bank to provide timely and high quality service. Our AI solutions use historical, real time data - gathered from various channels and business applications - to personalise the experience and augment the customer service agent's ability to serve a customer in the most effective and efficient manner.

Our research also found that although only one third of organisations find blending human and digital interactions difficult, a quarter of consumers feel getting to the right person is a long and difficult process. Banks can work hand in hand with AI to address these customer needs.

Solving issues

AI can be used to provide customer service agents with suggestions of tailored banking services, loan eligibility, and simply solving customer issues - increasing credit limits, cancelling lost ATM cards, etc.

For instance, a transparent way AI is used to improve banking operations, with improved efficiency and customer satisfaction, is through guiding automated diallers on the best time to call. Historically, customer service agents have focused on the efficiency of the call processes (quicker call detection, predictive time to connect metrics, etc) to optimise agent time; what they haven't been able to do is decide when to place the call in the first place to increase the chance to get a favourable response from the customer. Now AI is used to analyse historical success rates (conversion rates, call duration, etc) to individually tailor the best time to call a customer. AI can even be leveraged when engaging customers through virtual assistants or bots, which can tap machine learning and algorithms to respond to customer queries in real time.

Ultimately, providing a seamless, efficient, and effective customer experience will result in increased customer loyalty; and banks around the region are already experimenting with AI models for better and faster decision-making. In Singapore, OCBC is the first bank to launch its own AI unit focused on developing AI capabilities for its banking services, aimed at improving the customer experience.

As more banks implement these models, the benchmark for customer experience will rise. Jeroen van Oerle, an investor who runs Robeco (one of Europe's first fintech focused funds in the Netherlands) said: "Long term, I think this - harnessing AI and technology - will determine the split between winners and losers".

"I believe the Singapore banking industry is and will continue to be a winner. During the next decade, AI will be part of the fabric of our lives, making connections in visible and invisible ways. How it affects banking can go in several directions, but what's clear is that the industry in Singapore needs to be ready to adopt and leverage AI to the best outcomes, squarely putting the customer first."

The writer is managing director, Asean, at Avaya.