February 13, 2019

Financial Services of the Future: Assisted, Non-Assisted, or Hybrid?

Tim Miner

In this post, we share the benefits of a human and AI-assisted approach to financial services.  

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Financial services institutions will go through a major change in the next 10 years to ensure that they remain competitive within the marketplace. As the greatest intergenerational transfer of wealth happens a new generation, change is imperative to ensure that Fintech upstarts offer services that are more appropriate to this new generation.

One of the major areas of change for traditional institutions will be their offering of non-assisted interactions – and not that they don’t already have the ability, because they do. But offering only non-assisted interactions is not enough! They need to decide to do both, which is where the rub is.

Assisted interactions are the bread and butter of traditional financial services institutions. Client on-boarding is done in a branch. Multiple forms will be filled out under the guidance of a bank employee, and all is good. The Financial Advisor will then sit down and go over projections and financial goals, and look you in the eye to give you his best advice. Unfortunately, millennials won’t come into a branch in person, and prefer to do everything on their phones, where they can manage nearly all areas of their lives from wherever a healthy Wi-Fi connection exists.  

Now, let’s jump on the non-assisted bandwagon and offer robo-advisors as replacement for human advisors in our branches. Well, not so fast! These consumer-oriented robo-advisor offerings are struggling after initial market entry, as their acquisitions costs ($100/customer) are eating into their profits according to a Barron’s article on the subject. As one customer polled said, “The market’s going up, but my account is going down and I have no one to call to complain about the situation.” So, it seems as though the pure play non-assisted interactions are not the solution either.

So, what is the solution? A hybrid approach! One that offers the millennials everything they want in a non-assisted fashion on their mobile device, with the option to get a human to help when needed. How is that possible? Should a bank keep their branches fully staffed in the event that a client cannot figure things out and jump in when ready? Chances are, this is not a scalable model, and is likely cost-prohibitive. What is needed, however, is the ability to provide a person to chat/text with at the time that the problem occurs to get the issue resolved quickly. Finding this perfect mix of assisted and non-assisted offerings in a price effective and compliant manner is the key. This perfect mix will bring the assets of millennials into leading financial institutions of the future. This won’t be easy, and some dinosaurs who are reluctant to change will become large wrecks in our history.

According to American Banker, Wells Fargo is offering phone-based apps that will keep customers from having to come into a branch office, hoping to attract millennials. This strategy is being implemented without a major effort to close branches. American Bankers Association has found that millennials are three times more likely to open an account on their phone, but find that they really are looking for experiences – like human experiences that cannot be only found on a phone.

Tact.ai has the building blocks to design the next solution from the ground up. Tact is a collaborative platform that works on many edge devices, such as personal mobile devices and even voice-assisted devices like Alexa for business. The integration capabilities allow Finserv institutions to offer chat, text, and voice support directly from their own branded mobile applications, rather from a third-party application. In addition, voice-activated intelligent assistants can guide clients through on-boarding and remind them of needs like upcoming rebalancing efforts.

The good news for financial services is that the future is bright for those who can tune their client service offerings between assisted and non-assisted interactions. The bad news is that it has to happen soon to stave away asset loss for upcoming startups with a millennial mindset.

Tim Miner
Tim Miner
Director of Professional Services, Tact.ai

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