Banking sector shaking up customer service with AI technology
Customer service in banking has changed radically, with the traditional face-to-face relationship with a trusted bank manager being replaced by modern banking technology and a creep towards a cashless society.
Marketing Management Head of Department and Associate Professor Felix Amoah (above) and his master’s student, Christabel Rusike, investigated the factors influencing consumers’ adoption of chatbot-driven marketing activities in the local banking industry.
“The digitalisation of society has been one of the most important processes to have happened over the past three decades,” says Prof Amoah, who supervised Rusike’s research. “The importance of this process increased significantly during the COVID-19 pandemic.
“The innovation of automated customer-centric ecosystems has enabled the introduction of new business processes and models in banking.”
These include the emergence of cashless transactions (credit and debit cards), automated teller machines (ATMs) and banking apps for smartphones and computers.
“Banks are shifting from a labour-intensive approach to business to using machines, robotics and artificial intelligence instead.”
The evolution of banking
AI is shaping the way business operates in the 21st century, with most banking services now digitalised.
Services such as online and mobile banking and cashless transactions have been embraced by consumers, and have led to seamless banking, in which consumers perform their banking needs without interrupting their convenience or comfort.
“For marketing purposes, digitalisation is a gift: it enhances omni-channel marketing by boosting digital engagement with consumers and providing digitalised solution strategies,” says Prof Amoah.
“Through customer engagement and digitalised solutions, organisations help develop loyalty and trust that further leads to personalised relationships, enabling new product innovation and opportunities for integrating multiple products and services to meet customer expectations.”
“How may I help you?”
The use of chatbots has emerged as a new platform in recent years, with banks utilising them to engage with customers in a meaningful and productive manner, according to Prof Amoah.
“However, compared to mobile apps and social media platforms, chatbot adoption within the banking sector has not attracted many customers.”
This led Prof Amoah and Rusike to investigate the factors that influence the adoption and acceptance of chatbots within the South African banking industry.
The study also outlined what a chatbot is: an artificially intelligent (AI) conversational agent, commercial tactic or self-service technology that simulates human-like conversation and allows users to type questions which, in turn, generate meaningful answers to these questions.
In simple terms, it is a computer programme that allows humans to interact with digital devices as though they were communicating with a flesh-and-blood person.
The study identified eight factors influencing consumers in their decision to adopt chatbots in online banking:
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Relative advantage
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Perceived ease of use
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Perceived usefulness
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Facilitating conditions
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Price value
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Hedonic motivations (emotional, fun or experiential benefits)
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Social influence
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Perceived compatibility
“Exploring these factors as part of ongoing research would ultimately assist banks to position their offerings more attractively and productively, and help customers to articulate their own needs,” says Prof Amoah.
Who is the winner in digital banking?
While clients appear slow to embrace the perceived ease, speed and functionality of chatbot-based customer service, Prof Amoah says that the study aims to assist both banks and customers by helping the sector to formulate strategic interventions to boost use of chatbot platforms.
“Understanding how such a key functionality is received by consumers helps to enhance the online services offered by the industry.”
The digital divide
“The COVID-19 pandemic not only fast-tracked the transition to a digital economy, but also made digitalisation a ‘life pulse’ that promotes better quality of life, business survival, growth and connectivity,” says Prof Amoah.
However, inequalities and digital inclusivity are flashpoints, particularly in the sustainable development sphere, and Prof Amoah and Rusike conducted multi-stage research on critical areas needing more attention from government, policymakers and business.
These included inequality of opportunities in the digital space, challenges facing ICT use among SMMEs, the adoption of digital financial technologies and barriers to digital financial inclusion for sustainable development.
“The outbreak of COVID-19 exacerbated existing digital inequality, as the vulnerable became even more vulnerable, and are now deprived of fully engaging in the ‘new normal’ driven by digital technology. “Africa remains the most affected, as over half of its population, due to inequality of opportunities, is still without ICT, internet connection, access to, or participation in, the digital-driven economy,” Prof Amoah concludes.