How financial services sector executives are planning to tap AI

Senior executives from Australian financial services organisations Silver Chef, Mercer and Valiant discuss how they are looking to use artificial intelligence in shaping customer and business propositions

Delivering customer insight without cognitive bias, adding value to the in-moment experience and building commercial value are just some of the ways financial services executives believe artificial intelligence is going to transform their sector.

Speaking on a panel of Australian financial services businesses at this week’s Dreamforce conference, head of technology for Silver Chef, Vinnie D’Alessandro, said the commercial equipment financier is already a heavily data-driven organisation, tapping financial data as well as 30 years of product data in order to improve customer engagement. He saw the introduction of machine learning into the business as a way of removing bias and building an even better customer approach.

“A lot of our data acquisition recently has been about understanding consumer behaviour and profiles for us to market to them effectively and use the right touchpoints to surface content that’s relevant to them,” he said. “Previously, my data architect would pour over databases and spreadsheets. We’re now looking at machine learning and [Salesforce] Einstein to give us the insight without the cognitive bias.

“Sometimes sales people who have been there for 20 years have a way of doing things and think they know exactly how it works. We have been able to challenge some of those assumptions that existed.”

For Mercer Pacific chief customer officer, Cambell Holt, AI is anything that enables him to either add more value to customers, or within the business itself. As an example, he pointed out a call centre the size of Mercer’s measures the value of 60 seconds in millions of dollars to the organisation.

“If you bring the average call handle time by 60 seconds, you’re talking about millions of dollars in commercial value. So AI used for commercial value internally is one thing,” he said.

“The other is what AI can do for a customer in matching my expectations of what is a great experience. And we know those are being formed elsewhere.

“It might not be financial services that will be pioneering customer experience with AI. But I know my customers talk to Google Home about things, so I want to be in a position where they can have a conversation about my products and services with Google Home in the future. And that means mastering AI.”

The power of AI could also be used to further Mercer’s purpose, which is to create better lives, Holt said.

“I know only 20 per cent of the population we serve will ever access financial advice from us because of the cost of financial advice,” he said. “If I can master AI to deliver financial advice to the other 80 per cent of the population, then I’m delivering on my core purpose. The only way we do that is with AI, not traditional business models.”

Read more: How Mercer is using data analytics and insights to better engage customers

Small business loan marketplace, Valiant Finance, has a mission is to “download the collective brains of business bankers and codify that into a platform that allows customers, intermediaries and bankers to access it”, co-founder and CEO, Alex Molloy, said. That’s essentially what AI is all about.

“We want to continually improve that by seeing the results of what our customers get across the entire experience,” he said. “If we have recommended two options and they apply for them, we need to feed that back into the algorithm, as well as whether they actually get approved and the loan settles.”

The other way AI offers opportunity is by making it easier to glean specific insights on a customer. “As a small company dealing with fewer customers, it [data] is more about empowering our staff than doing massive analytics across huge customer databases,” Molloy said. “It’s about getting specific insights into a customer so my advisor can have a better conversation with that customer than anyone else.  

“Another great frontier for AI in financial services is not only making sure customer data is up to date in every channel, but that the advice provided at the back of that is the same answer with every experience.”

Understanding customer expectations

How to understand and meet changing customer expectations was another big subject for the panel. Holt said it’s no longer enough to be focused on your own category when it comes to customer experience.

“In today’s world, where platform businesses are so prevalent, we’re talking about ecosystems of value not linear value chains anymore,” he continued. “People used to have in-category expectations of experiences. Today, consumers bring their experience and service expectations from the best parts of their lives. It’s no longer good enough to think about customer experience within category, because customers are bringing expectations that have been formed by the best experiences they have ever had.”  

Over the last couple of years, Silver Chef has spent a lot of time mapping customer journeys out to understand what its customer’s dreams and ambitions are, D’Alessandro said.

“We know people don’t go home and dream about equipment financing. But what we do know is that starting any business is really difficult,” he said. “We want to be part of that journey, and to be seen as a trusted advisor.”

To help, Silver Chef recently purchased Profitable Hospitality, a content and learning platform for the restaurant and cafe industry. “It’s about helping them be better about business. If they’re more successful, they’re likely to start more and grow with us,” D’Alessandro said.

At Valiant, meeting customer expectations is a constant trade-off between sharing the universe of options available to demonstrate credibility and provide choice, and giving customers meaningful actions to take from that, Molloy said.

“You can inundate someone with choice but that’s not always helpful to them,” he said. “Our challenge has been how to show everything to people about what they could get, but still be clear on advice right for them based on their profiles, information and preferences. That’s driven our design strategies and also the involvement of more people in our process. For most people, that’s about being able to have a conversation with a human being.”

All panellists agreed financial services is in the midst of a massive market shake-up driven by technology innovation that’s not only made it easier for customers to switch providers, it’s also triggered fintech disruptors and new financing models. D’Alessandro said this is seeing more Australian financial services organisations becoming willing to partner with each other, even if they’re competitors.

“I think that’s because people realise consumers aren’t going to stay with one bank all the way through - they will cherry pick the best experiences that make it easy for them to consume finance and grow their business,” he said.  

Holt suggested it’s not a natural strategy to partner. “Partnerships are hard, most don’t work, but it’s a strategy that’s a necessity now as growth in financial services has dried up,” he commented.

One thing unique to the financial services space is that not every customer is right for everyone, Molloy claimed. That’s why partnerships are so powerful, he said.

“In financial services, one of the most negative things you can do is entice a customer to apply to you but then say no to them,” he said. “Partnerships are an admission that we have propositions that are right for certain customers in the market, and we can all be associated with positive outcome of a customer getting a solution that’s right for them.”

But any partnership requires a risk sharing model and has to be right for customers, Molloy added, along with alignment of objectives and the right balance of customer and risk management.

  • Nadia Cameron travelled to Dreamforce in San Francisco as a guest of Salesforce.

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