With brand experience increasingly online and digital-native players entering the market, financial services institutions (FSIs) will need to adopt a human-centric design philosophy to remain relevant and build stronger ties with their customers. Financial services providers must keep the customer in mind as they design their product offerings. This is especially critical in Asia-Pacific, where more consumers are coming online and online sectors are seeing robust growth.
In Southeast Asia alone, at least 40 million people connected to the internet for the first time in 2020 and one in three digital services are consumed by new users, according to the 2020 eConomy SEA report released by Temasek Holdings, Google, and Bain & Company. The region’s online population has hit 400 million, and seven internet economy sectors, including digital financial services and e-commerce, will clock more than $100 billion in gross merchandise volume.
Fuelled in part by the COVID-19 outbreak, the growth momentum is expected to continue with 90% of new online consumers indicating plans to continue using such services post-pandemic.
In Southeast Asia, digital payments are expected to surpass US$1.2 trillion in gross transaction value by 2025, according to the e-Conomy SEA 2020 report. Adoption of online remittance services also climbed two-fold since safe distancing measures kicked into place, with online value predicted to account for up to 40% of the total value of these payment services by 2025.
What customers expect from their financial services providers
With customers heading toward online platforms, traditional FSIs in the region that fail to transform quickly to ride the wave will be left behind and risk losing their foothold against their digital-savvy neobank competitors.
As it is, 71% of Singapore consumers experience at least one pain point with their bank today. And amongst those with three or more pain points, 77% express an interest in opening a digital bank account, according to a PwC survey.
Consumers want personalized, real-time engagements and FSIs need to understand their customers’ requirements to differentiate their brand experience and build loyalty.
This can be particularly challenging in Asia, where customer segments are widely diverse. Online users speak multiple languages, live in developed or developing nations, and reside in communities that are either largely unbanked or highly tapped financially.
FSIs will have to identify their targeted customer segments and figure out solutions they should offer to address these consumers’ different requirements, such as those living in rural areas versus those living in urbanized cities.
It means they will require tools powered by artificial intelligence (AI) and data analysis to understand their customers’ needs and improve service experience accordingly. At the same time, they will need to drive down operational costs.
Chatting up to better customer satisfaction
These shifts in consumer needs prompted insurance company FWD Group to develop an AI chatbot with the aim to enhance customer service delivery, reduce operational spend, and drive its Asian expansion.
It was critical that the chatbot, dubbed Enzo, had the ability to establish a more sophisticated understanding of human intent—the customers’ main objective when they key in a question or request.
Dialogflow, in particular, proved essential as it could interpret human intent in several languages, including slang. This was important since FWD had plans to expand its presence across Southeast Asia and the versatile language support would enable the company to do so more rapidly.
Within two months of Enzo’s introduction in the Philippines, the chatbot had handled queries from more than 4,000 customers, bumping up FWD’s previous response capacity by 7%. Enzo also registered a customer rating of 4.5 stars out of 5, which was equivalent to the company’s live chat service rating.
In addition, the insurance company is using Google’s Cloud Vision AI and AutoML to power its KYC (Know Your Customer) identity verification, enabling it to quickly determine the validity of a customer’s ID. The AI tools have improved FWD’s operational efficiencies by 20% and reduced identity verification costs by half.
Forward-looking FSIs such as FWD have achieved strong business results primarily because they realize customers should be at the center of everything they do. For FWD, the ability to dynamically translate and analyze their customer interactions as well as understand the context of what they actually need, regardless of language, has proven especially valuable in this region.
This type of customer understanding will go a long way towards creating stronger brand awareness and loyalty, particularly as digital transactions mean less human contact, and FSI customers increasingly use multiple service providers for their daily banking needs.
Adopting human-centric design thinking ensures products and services will actually be relevant and beneficial to the customers they are designed to serve. It also empowers banks to differentiate the human experience in every interaction they facilitate.
When an individual applies for a home loan, they do not simply want a loan; their ultimate objective here is to own a home. So rather than focus on providing a home loan, banks instead need to think about how to build their loan offerings around the customer’s desire to buy a house. And technology offerings are already emerging to make this easy for financial institutions, such as Google Cloud’s Lending DocAI.
By tapping data and infusing machine learning to understand context, as well as adopting more agile practices, FSIs not only ensure they remain competitive against their digital-native counterparts and amid changing consumer expectations, but create more genuine and enduring bonds with customers.
Learn more about Google Cloud for financial services.
By: Stuart Houston (APAC Director of Financial Services, Google Cloud)
Source: Google Cloud Blog