The future of finance: Part tech, still human

woman using tablet

It’s nearly a decade since the debut of the first mobile banking app1, and Americans just now seem willing to fully embrace mobile for finances. We may, in fact, be at a tech tipping point—where more than half of U.S. individuals and business owners are actively using mobile apps for everything from paying bills to applying for a loan. In 2017, more than 50% of U.S. adults used their phones to access their bank accounts; up from just 14% in 2014.2 People have become so tech-savvy that they are now more comfortable using their mobile phones to apply for a mortgage than to find love on a dating app, according to a recent Bank of America Homebuyers Report.

At the same time, people still value one-on-one time, and the financial advice that comes from speaking with a real person. “Our customers expect us to be easily accessible to them—whenever, wherever, however,” explains Cathy Bessant, Chief Operations and Technology Officer at Bank of America. “And that’s what we intend to be.”

In order to meet this challenge—and opportunity—banks and other financial companies will have to strike a balance between their offline and online options. That is, to provide people with choices, based on their comfort level and needs.

Upgrading the human experience

Looking back 10 years, when that first mobile app was launched, most people relied on ink and paper to balance their checkbooks, and waited for monthly statements to see how accurate they were. Today, you can simply ask a mobile-based virtual assistant to show you your transactions or how much you spent last month in online shopping, and you get an answer in seconds.

While there are those who remain cautious about using innovations such as virtual assistants for account information (According to a recent study by the Federal Reserve Bank of Boston, 70% of those polled said the they are still not ready to take the leap because they “lack trust in the technology”), they may soon be in the minority. In less than two months following its launch, more than a million customers adopted Erica, Bank of America’s new AI-driven personal financial assistant. In fact, virtual assistants are quickly becoming a standard tool in financial services, with companies already using them to managing customer queries, provide in-the-moment account information and chat with customers via social media platforms.

As investments in fintech like these continue to climb, banks are betting that the combination of convenience and transparency will not only build confidence in the integrity of technology platforms, but will also help build customer loyalty. There is evidence that such investments are already having their intended effect. A 2018 CFA Institute report notes that efficient use of technology enhances trust between advisors and clients, particularly in younger generations.3

Balancing tech’s convenience with personalized service will be especially important, however, as companies adopt artificial intelligence (AI) and machine learning, two of the most promising and hotly debated evolutions in technology. By 2019, 61% of financial service companies plan to use AI as part of their daily operations, according to an Adobe and Econsultancy report.4 In fact, banks are already using the technology to manage investments, detect fraud, and help with customer service. But as technology takes over more of the processes and tasks of personal finance, companies are proceeding cautiously. Reaffirming the essential role people will continue to play in financial services Bessant notes, “AI is a subset of human intelligence. It helps people make decisions about complex problems, but it doesn’t make those decisions for them.”

Ensuring that human judgment is a core part of the decision-making process, both online and off, is a top priority for banks.

The future is hybrid

With the proliferation of innovative tech like AI, new apps and other mobile tools, some question the role that “real” people will eventually play in providing financial information and advice. Not D. Steve Boland, Head of Consumer Lending, Bank of America, who thinks that when it comes to making money decisions, big and small, the option to speak or meet with real people remains critical. “Everyone brings different circumstances to the table,” says Boland. “Digital tools are essential for gathering information, but working with an expert who can explain how that information applies to your particular situation is just as important.”

And though some bank startups have chosen to abandon physical branches altogether, many banks, including Bank of America, continue to open new financial centers where customers are able to meet with specialists who can help them with their individual needs.

In the end, the real winners may be those companies willing to invest in choice—the ability for their customers to choose anything from a virtual voice assistant to an in-person meeting with a financial advisor. And as the next wave of innovation continues to meet the demands of increasingly more tech-savvy customers, there will continue to be new opportunities for the financial services industry to combine high-tech with high-touch, personalized experiences. Doing so has the potential to strike an important balance—one that supports customers’ desire to manage their finances how and when they want.



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