How banks can maintain and improve client engagement in a financial crisis

With interest rate rises hitting an 11-year high, a looming recession and instability in global banking, Australia’s banking sector is facing an unprecedented challenge to maintain customer engagement amid the current financial crisis. As a result, banking customers in Australia are feeling the financial pinch more than ever, so they need a robust, proactive banking sector that can help them face the financial headwinds and navigate the 2023 economic downturn. 

What key areas should Australian banks address?

There are three key considerations Australian banks must address sooner rather than later;

Fraud and data protection

As the world becomes more digitally-reliant, banks are looking at the increase in online payments and client onboarding. Digital banking requires increased screening, and banks must spend more effort on screening and investigating every transaction each person makes. 

When it comes to fraud, banks are now exercising more meticulous scrutiny. Informal industry research conducted by UiPath shows that Australian banks are hiring almost 2000 additional full time equivalent employees dedicated to investigating fraud alerts. Currently, 90-95% of investigations turn out to be false alarms, so a lot of effort is manually wasted.  

UiPath’s customer research shows that artificially intelligent systems can now automate fraud detection and investigation, bringing this effort down 40-60%. This is achieved by automatically checking every field and every detail to confirm documents are not fraudulent. 

For example, when considering debit card fraud, if an unscrupulous actor wants to close a banking customer’s debit card and see if funds can be transferred back to them, the bank can implement post fraud actioning with the possibility of reversing fraudulent activity. Also, banks can use analytics enabled by automation to identify potential fraud risks in real time. 

An individualised customer experience

Many Australian banks say the customer experience during onboarding can often be poor despite the best efforts of staff. This is why leading banks are looking at automation as a means to bring down the customer onboarding time by as much as 50%, according to UiPath’s customer research. Currently, it can take an average of three weeks to onboard a new banking customer using traditional, manually-led methods of document processing. 

Most banks want to bring this down to 2-3 days, which is achievable with automated marketing intelligent document processing. This level of automation can streamline the entire customer journey by automatically handling, reviewing and extracting data from documents. It makes the onboarding experience much faster and smoother for customers while significantly reducing the time it takes banking employees to manually conduct this process.   

As clients are onboarded, automation lets banks better store and analyse large volumes of customer data to offer an individualised level of customer service. For example, automation can be used to create machine learning models that analyse the living expenses of clients and proactively send them tailored offers to support their financial and expense management.

The data can be harmonised across all areas, from core banking to lending platforms. Thus taking data out of the siloes and making it actionable to benefit clients. At the same time, automation can provide better synergies across the omnichannel customer experience, whether clients are using phone banking, digital apps, chatbots or customer service agents.

This can reduce problem resolution from around seven minutes down to two minutes, or even less, per customer. Email and chat bot-based servicing has multiplied since COVID-19.

Instead of delivering a standard auto-generated response, next generation automation tools can securely interact with back-end banking systems to provide a more meaningful resolution for the customer. For example, the tool can respond by advising the customer the issue has been resolved or request further information if required to resolve the situation.  

Heritage Bank has automated more than 80 processes since 2017 as it transformed to become a digital bank with a physical presence. The bank has focused on building scalability into its back and middle office processes to provide better efficiencies for customer service staff so they can focus on managing the increasing scale of the bank’s membership base.

Automation has helped improve customer and employee experience and improved the bank’s ability to attract and retain clients and employees. Investing in automation has also achieved 98% accuracy in machine learning across banking and wealth management applications, and provided up to 90% process automation when compiling living expense reports. This is freeing up employees so they can spend more time offering personalised services to clients. 

Sustainability matters – gaining consumer trust in ESG initiatives

Sustainable investments and environmental, social and governance (ESG)-specific initiatives remain a key concern for banking clients, even in the midst of personal financial pressures. There is a cultural shift where clients expect banks to comply with ESG regulations across all aspects of transactions, from green bonds to carbon trading and asset management. 

However, banks are not yet showing the level of commitment to automation that will help drive environmental, social and governance initiatives. A recent IDC Asia Pacific and Japan automation survey reveals that only about one in three banks are keen to automate ESG processes, and only about one in 10 have already deployed automation in this area. 

Considering customer sentiment, banks that can demonstrate a well-articulated ESG strategy with a long-term commitment to addressing the transition to ESG and net zero will be more likely to gain trust and inspire confidence in their customers now and into the future.

Especially in times of financial hardship, customers need to trust that their bank will be proactive in anticipating issues and recommending appropriate solutions. The technology now exists for banks to offer this level of service through end-to-end enterprise automation that gives them the visibility and responsiveness they need in a highly volatile market.

While the technology itself is fairly advanced in the financial services sector, enterprise-wide adoption by banks is still largely in the early stages of digital transformation. The IDC survey found that only around 17% of banks had adopted end-to-end enterprise automation, with most banks automating only some tasks in one or two business units. 

Even when banks begin their journey by automating some key processes, it can ultimately free up significant time that is reinvested back into the customer experience. For example, MyState Bank is using enterprise automation in selected processes to improve both employee and customer experiences, customer satisfaction and to reduce operational costs and errors, which is saving around 435 hours a month on internal processes. 

Imagine this scenario on a much larger scale across the entire firm. By taking away process work and freeing up employees to engage more with clients, it turns process-based employees into customer advocates. This has a far-reaching impact on customer service, engagement and the trust that a bank can earn. It also improves the employee experience and workforce retention, which puts the bank in a much stronger competitive position. 

Mark Fioretto is the Area Vice President and Managing Director for Australia and New Zealand at UiPath.