Banks brace for next big thing: the return of the human being

JUST as automation transformed manufacturing in the 20th century, big data and artificial intelligence will change financial services, healthcare and numerous other industries in the 21st. It will be a boon especially for banks, which will be able to manage customers and risk on a scale and with cost efficiencies never before possible.

But, of course, this is not an entirely good thing. As more processes become automated and more interactions driven by computer algorithms, human beings will disappear from the banking environment.

Customers will feel increasingly alienated, and will eventually see little difference between traditional big banks and new virtual banks that exist only online.

For this reason, some banks are preparing for the next big thing in financial services: the return of the human being.

“It’s already a big challenge,” says Lyndon Subroyen, global head of digital at Investec. “How does a bank become human? How do you maintain humanity in an age when everyone is trying to dehumanise experience?”

A South African bank that seems to get it right despite rapid growth, low fees and a large customer base is Capitec. Subroyen praises this “challenger brand” for showing empathy with customers, for example, by opening on Sundays for those unable to get to a bank during working hours.

At the other end of the branch scale, the financial technology startup TYME, acquired in 2015 by Commonwealth Bank of Australia, is signing up 5 000 customers a week despite having mainly self-service kiosks across the Pick n Pay chain of stores.

Thanks to a set-up that includes Wi-Fi, camera, document and fingerprint scanning, the kiosk replaces what has previously been a human-intensive task.

Add online account and transaction access on the customer side and artificial intelligence replacing the banker’s guidance of the customer from the bank’s side, and the future suddenly stares us in the virtual face.

But it’s not everyone’s future, warns Subroyen.

“Large retail banks want more automation and selfservice because it helps contain cost, but we’ve never gone the digital path to contain costs. For us, it’s about choice: here are things you can do by yourself, knowing they are backed by a person, but if you want to deal with a person, we are here.”

The need goes beyond merely dealing with a human being. Investec recently launched a campaign to highlight its philosophy that an individual can’t be defined by data alone.

“Data can help define you, but cannot tell us who you are. Humans have a role to play to understand your aspirations, and not just tell you what pot of money to put where. You have dreams of a home or kids, and perhaps aspire to an antique piece of furniture or art. That won’t emerge from data about your behaviour.

“If teams are sitting in product design in a bank, they also have to keep being reminded that people don’t buy mortgages, they buy homes. It’s a big emotional decision. A bank may see it as a product, but the customer sees it as a goal, as the future.”

At the same time, Subroyen does not imagine humans will always be better than machines: “Artificial intelligence could get to the point where it can empathise and learn through data. But for now, we will use it to augment the offering, not define it.”

Goldstuck is the founder of World Wide Worx and editor-inchief of Gadget.co.za. Follow him on Twitter @art2gee and on YouTube