Banks switch from phone menus to robot advice

Few household chores are as infuriating as spending an age on the phone to complain to your bank, recover a lost password or answer some minor financial query.

Hold music, press number 4 for an option that is only half-related to your problem, more hold music.

Banks are under pressure to cut costs while improving service – which is crucial to keeping customers and improving the industry’s battered reputation.

One hope lies in new technology and, in particular, robots. Several British banks are ploughing money into artificial intelligence (AI) in the hope that it could start helping customer service behind the scenes in the coming months and soon be let loose on the public.

Barclays’ former chief executive, Antony Jenkins, believes half of all jobs in banking could be chopped in the next decade as automation takes hold, underlining the scale of potential transformation.

Enabling Britons to check their balances, transfer funds and even pay in cheques using smartphones has already allowed banks to cut hundreds of branches, saving millions of pounds while simultaneously improving service. In the near future basic complaints handling, forgotten passwords and other simple queries could also be a human-free zone, with several banks working to deploy online chat systems that run on robots.

Royal Bank of Scotland is trialling its system initially as an aid to staff, who answer the questions themselves, while the robot learns from their actions.

“AI allows us to answer simple customer questions quickly and efficiently, while freeing up time for our staff to answer more complex questions,” says Chris Popple, RBS’s head of digital banking. “We are now looking at conducting pilots with members of the public to test the experience, refine its intelligence and understand its suitability for customers.”

Two key problems have presented themselves so far. The first is that the artificial intelligence robots are new and, frankly, not very good.

Atom Bank, a new mobile app-only lender, is tinkering with a robot that currently gets the answer correct roughly 65pc of the time. Put another way, the robot gets the wrong answer seven times out of every 20. The bank wants to improve performance to at least 85pc accuracy before letting the public use the service.

atom bank boss
Atom Bank, headed by chief executive Mark Mullen,

Some of the gremlins should, in theory, be addressed through practice. Robots can learn colloquialisms and spot spelling mistakes and poor grammar, by watching humans process enquiries.

When RBS started using the system, it could answer only 20 questions and was accurate just 10pc of the time. After several months of trial use, the machine can now answer 400 questions with 90pc accuracy.

A second problem is that machines might be able to translate a query, but they are still unable to empathise.

“Customers are becoming much more demanding [of their banks] and they want a service which offers convenience, choice and competence. There is definitely room for AI if it speeds this up, is convenient and offers a choice,” says Mike Petrook, from the Institute of Customer Service.

But customers also value helpful staff with a positive attitude. “That is where AI, at the moment, can fall down – it speeds things up, it does point people in the right direction, but it is not yet mature enough to understand human emotions,” he says. “It could be understanding that someone has different financial commitments they have not yet started, for example, someone who may be about to send their kid to private school. Or in complaints, an AI system would say, ‘What is your complaint, OK I can resolve that,’ but it does not hear the frustration.”

The ability to speak to a person when tackling big transactions such as a first mortgage is highly valued.

The banks acknowledge this – Atom Bank will give customers the option of chatting to a human or a machine. First Direct’s online advertisement promises no one will ever have to talk to a robot.

Banks are trying to find new ways to help with big decisions including investments, with so-called robo-advice that would cater to customers unable to afford a financial adviser in the wake of tougher rules on fees and training.

Xerox, a technology firm which runs Atom’s robots, is sceptical that customers will be comfortable with such a basic service. “It is as much about the technology as it is about trusting the person,” said Doug Overton. “The customer is paying for advice, they want to look the person in the eyes, they want to really know the person has all of the professional credentials to give that advice. That is a behavioural change that will take a number of years before you get there.”

That personal trust is not needed for basic queries. But when it comes to high-value banking jobs, the human staff are still safe in their jobs – for now.

First appeared at the Telegraph