Is human-less banking backfiring? Advice for banks as customers crave human connection

The digital evolution of banks has been nothing short of a revolution. Fundamentally transforming the way financial services are accessed and delivered, the aim was always to enhance convenience, speed, security, and enable 24/7 access for customers.

While tech - including telephone banking, automation and AI-powered chatbots - has certainly delivered on this front, the result of its integration has resulted in a large percentage of banks’ customer interactions now being faceless. And, rather than enhance the banking experience, this faceless element has - for many - had the opposite effect.

In fact, we recently released research covering the UK’s banking attitudes and preferences and it that showed nearly half of us* (46%) are craving human connection - all while banks continue closing branches and make a move towards more faceless solutions. This finding is arguably even more pertinent in the current climate, where many customers are more financially vulnerable due to rising costs and require a certain level of human support.

More face-to-face?

So, should banks just revert to offering more opportunities to connect face-to-face? Or should banking customers simply adapt to navigating the digital experiences that have been put in place for a faceless future?

One point worth considering is that as well as customers expecting accessibility, convenience and speed from their banking services - demands that can only be met efficiently with the aid of tech - implementing more automation and digital experiences also benefits the banks themselves.

First up, automation = cost-savings. By reducing manual labour-intensive processes with technology-driven solutions, operational costs are reduced and profitability is higher.

Staying ahead of the competition in an increasingly tech-led world is another big pro. Banks face competition not only from traditional rivals but also from fintech startups and tech giants entering the financial sector. Banks need to innovate and offer compelling digital experiences if they’re to avoid falling behind.

Enhanced security features, such as biometric authentication, real-time fraud detection or encryption - all more robust than traditional security measures - are of course in the customers’ interest. But they’re in the banks’ interest too, helping prevent financial losses due to cyberattacks or fraudulent activities.

Advances in AI, machine learning, and data analytics also enable banks to offer more sophisticated digital services, including fraud detection and personalised recommendations. For example, digitalisation allows banks to gather and analyse vast amounts of customer data, and this paves the way for data-driven decisions and the ability to offer more targeted products and services and intelligent recommendations.

However, our data revealed that 74% said they felt their banking “isn’t personal enough”, while 47% said chatbots simply aren't answering their questions.

Striking a balance between technology and human connection

While customers are clearly frustrated with some elements of these digital services, as they fall short of being useful, and seek more human connection, it’s not realistic to expect a return to bricks and mortar branches, or to see an expansion of call centres. In fact, those that are focusing on High Street branches, such as Metro Bank, are being criticised, with former chairman Anthony Thomson recently quoted as saying the bank has a "limited future" if it continues with the strategy. It is, however, reasonable for customers to expect a better relationship with their bank.

One solution to achieving future experiences that work for both customer and bank is to provide the right balance of digital convenience with opportunities for human interaction if digital experiences aren’t meeting needs.

If banks can’t solve the frustrations for customers quickly, consideration should be given to what temporary experiences could be put in place to provide support - albeit digital or human to human - while work happens on aligning and designing digital experiences that fit with current customers. Short-term investment could create a lot of value and minimise the potential risk while generating brand goodwill and value for customers in the process.

Utilising next-generation tech

In the long-run, however, digital teams need to be looking at how to utilise next-generation technologies and design to improve digital experiences in a way that brings human interactions to life in more sophisticated ways.

At the moment, some digital systems are causing more pain than good and need work - and not only to avoid frustrating customers at a time when they could conceivably need more communication with their bank. Next-generation technologies could go deeper into solving customer requests and eliminating the need for human interaction.

But banks should be careful not to roll out generative AI solutions to customers without doing the work to understand what customers want from AI-powered experiences. The aim here is to meet customer needs with the right level of design to aid successful implementation.

*survey of 2000 multi-generational group of adults across the UK