Increased adoption of human+machine model and conversational AI by banks: Accenture in India

Accenture in India has been realizing tangible outcomes for clients through provocative thinking and transformative insights. Accenture in India offers a wide range of services spanning strategy, consulting, digital, technology and operations.

Here, Ms. Sonali Kulkarni, MD and Client Group Lead, Financial Services, Accenture in India, tells us more. Excerpts from an interview:

DQ: The COVID-19 pandemic has turbo-charged digital adoption in the Indian banking sector. Banks across the board are making a concerted effort to digitalize their operations and customer touchpoints.  What are the key digital priorities of banks in India, today?

Ms. Sonali Kulkarni: The Covid-19 pandemic has accelerated digital adoption more than any other event in recent history. Customer experience and collaboration tools, analytics, AI, security and cloud adoption are the top-most digital priorities of most banks in India, today.

When the national lockdown was announced in March 2020, banks initially focused on maintaining business continuity. The banking industry had to act quickly to ensure that their year-end reporting, on-going monitoring and customer servicing processes factored in and responded effectively to the impact of the moratorium announced by the Reserve Bank of India.

Since then, banks have been using more video collaboration tools and chatbots. They have enhancedfunctionalities on their captive banking apps to facilitate live interactions with customers as well as enablecustomers to seamlessly enquire about, service or open new accounts.

The Indian banks have also demonstrated a strong intent to move to the cloud to harness the benefits of cost elasticity and scalability to manage both upward and downward surges in consumer demand. This increase in digital customer engagement has also led to banks ramping up their cybersecurity and fraud-protection tools to protect customers.

Banks are also making strides in leveraging advanced analytics and AI, to identify pressure points in their business and adapt to pronounced consumer behavioral shift towards digital. We see this trend continuing to play out in the months to come.

Analytics is helping banks with accurate credit decisions, fraud detection, collections strategies and forecasting of liquidity needs—decreasing cost and mitigating risk besides helping them deepen their customer relationships through more personalized products and services.

Given lower branch footfalls and reduced in-person interactions, banks would need to make greater use of AI-enabled scriptless conversations for customer servicing, engagement and cross-selling. We can expect to see increased adoption of the human + machine model and conversational AI by banks.

DQ: Where do you see the future of banking headed – will there be more phygital banking models, going forward?

Ms. Sonali Kulkarni: The transition to Phygital was already in motion. Covid-19, which has led to significant changes in consumer behavior, will further drive banks’ business models towards digital.

While brick and mortar branches and assisted sales will remain an integral part of the phygital model, banks willneed to move to digital native journeys and structures.

For example, the customer experience across all of a bank’s channels should be homogenous – be it by way of a DIY digital app or a sale assisted by a branch employee.

DQ: How is AI helping banks meet their business priorities?

Ms. Sonali Kulkarni: AI and an AI-enabled workforce can help banks significantly improve business operations, customer experience, employee productivity and reduce security risks.

As per the Accenture Banking Technology Vision 2019, seventy-nine percent bankers, globally, believe that AI will become a co-worker, collaborator and trusted advisor in two years.

AI can automate time-intensive and repetitive tasks, thereby, the reducing operating costs and boosting employee productivity, process efficiency and eliminating human errors.

For example, AI can collate, classify, and enter customer information directly from paperwork and forms, thereby freeing up employee time for higher value tasks.

ML-based algorithms can be used for smarter underwriting of consumer credit risk. In addition, AI is helping banks improve their ability to predict/forecast and thereby manage risk better.

AI-enabled Conversational User Interfaces (CUIs) like messaging apps, bots and voice-enabled devices have helped banking services become more intuitive and intelligent – both to customers and employees.

These interfaces work well as they are a more human-centered mode of communication - using text or voice to engage in a dialog - rather than clicking and scrolling through content. CUIs help reduce customer acquisition costs and improve the conversion rates of digital touchpoints.  

Leading banks in India have already started adopting CUIs. However, not much headway has been made in terms of evolution in design and use cases since the time Indian banks first deployed bots for customer query resolution.

This is because, most banks have taken a piece-meal approach to AI adoption. Going forward, banks need to develop a more holistic approach to AI adoption to unlock trapped value across the banking value-chain This shift is not just a technology intervention. It is an organization-wide transformation that requires new skills, new operating models and new IT.

DQ: The surge in banks’ digital customer engagement needs to be supported with a corresponding ramp-up of cybersecurity and fraud-protection tools to protect customers. What is the security approach that you recommend for banks?

Ms. Sonali Kulkarni: The industry has seen a surge in digital payments over the past few years due to multiple triggers including the demonetization drive. Now with the Covid-19 pandemic, the adoption of digital transactions has significantly increased.

The increase in the number of users and transaction volumes comes with a higher cybersecurity risks such as information theft, online fraud, virus attacks, malware, ransomware, distributed denial-of-service (DDoS), etc.

As per Accenture’s State of Cyber Resilience survey, the top-three measures of cybersecurity effectiveness emphasize speed: how quickly an organization can detect a security breach, how quickly it can respond, and how quickly it can get its operations back to normal.

Beyond these priorities, the effectiveness of resiliency (how quickly they recover from a breach) and precision (improving the accuracy of locating cyber incidents) are also key.

Banks need to have strong detection-and-response capabilities to find and stop breaches fast, before significant damage is done.  The key components of a cyber resilience framework include:

Strong Customer Authentication (SCA) along with secure communication are key to cyber security.

DQ: How is the banking sector in India keeping pace with futuristic work-place technologies, and where do you see the future of work at banks headed in the post-Covid-19 era?

Ms. Sonali Kulkarni: Over the long-term, we expect the future of work at banks in India to be become more digitally enabled and be supported by the human+machine model.

Routine tasks like data entry,passbook updates, cash deposits and the verification of KYC details will get automated and as a result,the nature of work for those working in branches will evolve to advisory and other value-added tasks.

More remote working and virtual collaboration is getting enabled for those in sales roles and centralizedfunctions.