Many of us couldn’t live without our bank accounts. Whether it’s for the morning commute or the evening food shop, we’ve seen cash circulation decrease. More and more people rely on contactless payment methods such as Apple Pay, every day. UK Finance has forecast that by 2031, notes and coins will account for only 6% of all UK payments

Banking gaps in our society are a threat

This poses a potential problem for the unbanked population i.e. those who don’t have a bank account. In 2022, they made up 1.3 million adults in the UK. These individuals miss out on the benefits that many of us might take for granted, such as interest and online shopping options. And not to mention the ability to easily receive wages, pensions and government benefits. As businesses continue to move towards using cashless transactions exclusively, it is the unbanked who will be most vulnerable.

There also exists a population who are under-banked.  Despite having a bank account, some people lack access to a full range of banking services and instead, rely on alternative financial services instead. The uninformed population shouldn’t be forgotten as well, they can encompass both the unbanked and under-banked. These are types of individuals who are unaware of the banking services available to them and so do not use them to their advantage. 

The UK’s Financial Conduct Authority (FCA) recently introduced a new Consumer Duty. This forced banks to offer more support to customers who need it. As we continue to adopt technology towards a cashless society, financial institutions will need to ensure their CX is up to par. As we see more high street banks close and shift online, fortunately, there is a growing number of digital tools that banks can optimise to provide greater value and support to their customers.

A banking revolution

Momentum towards a cashless society has been building, especially since the COVID-19 pandemic. As fears around transmission grew and businesses moved online, we saw an increase in the number of people opening bank accounts and using digital payment methods. This new audience presents an opportunity to banks and financial institutions. There now exists a population who are new to banking and learning how to manage their accounts.

Alongside the growth of online payments, we’re seeing a rise in the use of AI in the banking industry. 82% of UK Financial Services leaders say the use of AI is a priority for the next year. 

There are two main ways that AI can help banks to develop better relationships with new and existing customers on the back end. Firstly, the ability for AI to automatically perform repetitive tasks means it can free up time for CX agents. Then, they can focus on the unique and complex customer issues. As customer expectations are at an all-time high, chatbots are a great way to help provide quick and easy answers. This upkeeps a level of immediate service. 

As well as freeing up agents’ time, AI can also provide agents with existing data on customers. This personalised approach means banks can build trust and lasting relationships. 79% of FS leaders say that personalisation increases customer retention. By liberating CX agents, and empowering them to deliver tailored information, AI can help financial institutions deliver more valuable information to customers.

Technology we can trust

Whilst the benefits of incorporating AI into banking might be clear, this does not guarantee a willingness of customers to buy into the services on offer. As can be expected with new technology, some consumers are sceptical when it comes to using AI. This, combined with a wide collapse in economic optimism, means banks and financial institutions will need to work harder to earn the trust of their customers.

People trust banks with a lot of sensitive information. It’s imperative that this is considered when AI tools are being developed within a business. It’s essential that privacy, compliance and security principles are built in from the start of a tool’s development; as opposed to accessories tagged on at the end. This includes the anonymisation of training data, providing opt-outs for customers, and ensuring a diverse workforce builds the tool, to mitigate the risk of bias.

Finance goals, spending habits and money management tactics vary between individuals. It will be down to FS providers to offer personalised products and services to provide more value to customers. As such, AI will emerge as a vital tool. But whilst AI helps provide personalised solutions, this alone does not earn trust from customers. With fewer physical branches on the high street, banks can no longer rely on the trust generated from face-to-face interactions. Combining AI with humanity in CX and the reassurance of security will help institutions to leave a lasting impression. Thus, earning the trust of customers.

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