The finance industry has officially entered the era of artificial intelligence (AI), with nearly two in every three Americans indicating that they want more AI embedded into their financial services. Today, fintech companies are using AI for everything from fraud detection, to credit scoring, to automating tasks and customer support. Conversational AI in the form of chatbots have been particularly valuable, providing clients with round-the-clock support and addressing frequently asked questions.
But if you think this seemingly insatiable desire for AI and the onslaught of new and improved automation is going to eliminate the need for humans, think again. As one Harvard Business School professor noted, “Just as the internet lowered the cost of information transmission, AI will lower the cost of cognition.” Did the advent of the internet eliminate the need for humans to do jobs? No–it just made humans better at their jobs.
Similarly, fintech customers increasingly expect their providers to deliver seamless, AI-enhanced experiences, but this is not going to eliminate the need for people any time soon. The primary reason is that finance is a highly sensitive and personal area of most peoples’ lives. In fact, it’s estimated that more than a third of Americans review their checking account balance daily, and people expect exceptionally easy and convenient access to both their information and advice, especially in the current climate of inflation and economic uncertainty.
Embracing AI–With Caveats
Moreover, how a fintech handles customer service is the single most important factor in determining whether a customer will stay with their incumbent provider or switch to another. As noted above, an estimated 60 percent of Americans want fintech apps to use AI for a more personalized approach. However, most Americans are not ready for a fully automated future.
This is why retaining the human touch can be one of the most significant challenges fintech companies face as they build and refine their tech arsenals. In fact, 61 percent of consumers note that they prefer good old fashioned phone calls when they need customer service. When they can’t reach a live person, customers feel dehumanized, a big reason for this being that the phone tends to feel so much more personal than other channels. As it turns out, it’s hard to compete with a real person on the other end of the line when a customer is upset over a problem.
Complaint management represents a prime area to pair machines and people together, allowing each one to contribute in the areas where they are the most skilled. Effective complaint management systems are vital for two reasons–first, they ensure a high level of customer service by ensuring complaints are addressed in a timely, transparent fashion, and deliver what customers want in terms of simplicity and empathy. Secondly, and perhaps just as importantly, effective complaint management is essential for mitigating compliance risk. The number of complaints the average fintech receives per year is increasing dramatically; as their channels for communicating with customers proliferate (email, chat, mobile app), so too does the volume of complaints. This can overwhelm not just customer service teams but also compliance teams, as customers who don’t receive a prompt response can escalate their issues to regulators.
This danger is very real for fintechs. The Consumer Financial Protection Bureau (CFPB) received more than 1.6 million consumer complaints in 2023, showcasing a broad spectrum of issues across various financial products and services. Since the partner banks are typically “behind the scenes” of the transaction and the fintechs are consumer-facing, consumers are more likely to submit complaints against the fintech. All of this means that banks need to hold their fintech partners to a higher compliance standard as regulatory scrutiny of bank-fintech partnership increases.
For financial organizations, AI in the form of conversational intelligence tools can be a much-needed answer. It can be used to determine what customers are complaining about by profiling the Voice of Customer (VoC) and identifying the highest priority complaints that a firm needs to focus on immediately. Moreover, AI can analyze, catalog, and categorize complaints across 100 percent of customer conversations and help perform accurate root cause analysis, in order to identify systemic issues. For example, perhaps there’s an online loan form that’s inaccessible or hard for persons with disabilities to navigate, which could lead to accusations of unfair lending and leave a fintech vulnerable to CFPB corrective action. AI is capable of picking this needle out of the haystack so compliance professionals can give it the required attention a high-risk scenario like this deserves.
AI won’t replace humans, but humans with AI can naturally do a better job than humans without it. AI-enhanced complaint management systems can now help fintechs grow their compliance processes to be more accurate, actionable, and scalable. However, as we’ve said, this does not completely replace humans as compliance and customer service professionals, but actually enhances their role–enabling them to work faster and more efficiently, avoid compliance risks and ultimately give customers a delightful experience.
