Adopting new technologies or platforms has accelerated at an unprecedented rate. But it wasn’t always that way. When the telephone first entered the mainstream in 1878, it took 75 years to reach 100 million users, compared to just 16 years for the mobile phone and two and half years for Instagram. Fast forward to today and ChatGPT acquired 100 million users within the first two months of launching.
Technology adoption is accelerating. This is driven by innovation and crucially, “changing consumer behavior,” said Santosh Kumar – VP and Head of Financial Services Solutions for Europe and RoW at HCLTech, during a keynote speech at the Banking Transformation Summit in London.
“When using these consumer platforms people expect a seamless and personalized experience. That experience is exactly what they want from their banks,” he added.
Kari-Anne Clayton, Head of Strategy, Transformation & Risk at NatWest for Retail Digital Technology, who are a client of HCLTech also took part in the keynote, agreed and said: “As a society and as a culture, we're poised to adopt technology and innovation in a quicker and more agile way.”
This is because in the next ten years the world will experience more technological progress than it has in the past 100 years.
In banking terms, this technological shift is demonstrated by the mass adoption of mobile banking, which emerged in 2012. By 2021 in the U.S. two studies from Cornerstone Advisors found that mobile banking penetration had grown to 95 percent in Gen Z users, 91 percent in Millennials, 85 percent in Gen X, 60 percent of Baby Boomers and in 27 percent of Seniors.
Conversational banking, with the rise of chatbots and intelligent and automated interactions followed.
What’s next? Kumar believes there’ll be a “cognitive leap forward in banking.”
He said: “Today, many banks are investing money in leveraging and delivering cognitive AI experiences for their employees, relationship managers and customers. Some of them are adopting this technology to drive operational transformation, personalized content management and the use of generative AI technologies to provide hyper personalized experiences to the customer.”
The Fifth Industrial Revolution
This cognitive leap with personalization at its center has kick started the Fifth Industrial Revolution (5IR), according to Clayton.
5IR describes the collaboration of humans and machines in work and society.
“We're currently living in the Fifth Industrial Revolution, where personalization and innovations like neurological interfacing, as well as sustainability and having an underpinning of environmental, social and corporate governance responsibility are [now the norm],” said Clayton.
The catalyst for this new era was the app.com revolution and the resulting ecosystems that were built, following the launch of the iPhone.
This and the emergence of cognitive technologies like generative AI, although not a silver bullet, “will change the face of human and banking interactions for the better,” continued Clayton.
"When you think about chatbots, AI and deep learning, technology will continue to evolve. Technology, in a lot of ways, is great to safely experiment with before productionizing it. But it always comes back to cognition—acquiring knowledge—and trust,” she added.
Even technologies that are considered cutting edge now, will evolve and change. As the banking industry drives transformation through current and future technology trends, maintaining trust in this ecosystem is fundamental to future consumer adoption.
There are three aspects of trust, according to Clayton:
Whether a human or machine, can you do the job? In the context of banking, can you advise me on debit cards, credit cards and mortgages as a human or a chatbot?
Whether a human or machine, can you advise me transparently and honestly?
“This can be a problem with some Large Language Model technologies as they occasionally ‘hallucinate’ answers to questions.”
“It’s a challenge we're investigating, as the key aspect is to supercharge the banking experience safely. If a customer asks for advice and the machine gives something back that’s not entirely true then this may become a liability issue,” said Clayton.
Whether a human or machine, can deliver in the best interests of the customer?
Cognitive banking: The next level
Over the last five years, NatWest, has deployed a chatbot called Cora. Cora is powered by IBM’s Watson, and it does a variety of things, such as changing addresses or phone numbers and helps compare credit and debit cards.
“The pandemic accelerated the adoption of chatbots like Cora, but those capabilities—what was once exciting and a ‘delighter’—soon became the status quo. And with customer at the heart of the experience, it’s about finding what will delight next and keeping those high levels of interest and engagement with our customers.” said Clayton.
Today, some of Cora’s features are linked to the mobile app and the chatbot handles more than ten million conversations a year. NatWest is also training Cora on large language models in a secure setting.
Looking forward, there is a ground swell of possibility and innovation for the next stage of banking transformation. “Concepts like facial recognition, reading and interpreting human moods, response and reaction and even advances in neurotechnology are no longer science-fiction concepts, but rather being experimented with in laboratories worldwide. While we don’t anticipate chatbots to be picking up brainwaves any time soon, the only limitation on innovation is our imagination,” said Clayton.
While this revolution in banking and beyond is exciting, it’s crucial that industries implement cognitive technologies in a responsible manner. They must ensure that unconscious bias at the programming and training stage is stamped out and that the customer understands the AI practices or techniques that they are interacting with.