Financial services companies in Asia looking to streamline costs to maintain profitability and boost dividends to shareholders have a new tool at their disposal that also appeals to customers: robots.
Perhaps the most high-profile robot in Asian banking is the SoftBank Group-made 48-inch humanoid called Pepper, which debuted in 2015 at Mizuho Financial Group's flagship Tokyo branch, entertaining customers with games and multimedia and providing basic information on products. It may have helped open customers' eyes to the possibilities of robotics.
Globally, nearly seven in 10 consumers of banking, insurance and financial advisory services said they were willing to use robo-advice -- advice and services generated by a computer independent of a human adviser - in an Accenture survey of 32,000 people in 18 markets.
This does not mean that people are out of the picture. It means financial services companies need to provide more nuanced services; a high number of consumers still want human interaction for their more complex needs.
This presents a challenge for managers who need to figure out how to blend a physical presence with an advanced digital user experience as they look to integrate robot and human services with a host of other digital offerings. The countries with the biggest appetite for robo-advice, according to the survey, are emerging economies. In Indonesia, 92% of respondents were ready to take the plunge and levels were almost as high in Brazil and Chile.
Along with Thailand, these are markets where it is already common to use a smartphone or other digital device as the primary vehicle for financial services interactions. This is not too surprising: Indonesians and Thais have been using digital services to transfer money and check their cash balances for some time.
Now these customers are willing to use robo-advice for even more services. In Thailand, for example, this includes determining which bank account to open (87% willingness), which insurance coverage to purchase (88%), which investments to make (94%) and how to plan for retirement (90%).
Consumers perceive several benefits around robo-advice, including speed, lower cost and less chance for human error. Financial services companies in turn seek to benefit from internal cost reduction by providing customers with a robo-option and freeing up staff to handle trickier stuff.
For example, more than half of Hong Kong consumers still want human interaction, especially when filing complaints (60%) and seeking advice about complex products such as mortgages (54%). This means branch networks need to combine staff with digital capabilities so customers can choose the type of service they want.
This should mark the beginning of the end of painful telephone calls to banks with customers often left on seemingly interminable hold. More roboticized services should get customers' queries answered faster.
Keeping up with competition
Financial services companies that fail to keep up with the changing times will simply lose customers to more switched-on competitors. We have witnessed this in other industries, from travel agencies and taxi services to the impact of online shopping on physical retailers.
Not every new move has to involve robotics, but they should focus on what customers want: simple, fast, efficient and cost-effective service. Non-traditional competitors -- think of Alibaba Group Holding affiliate Alipay and Tencent Holdings' WeChat Pay and popular services such as Hong Kong's Octopus stored-value cards -- are taking a chunk of business largely because their services are convenient and intuitive.
While robots are not widespread yet, a handful of banks have begun to deploy them in their back offices. But robots are not the only path to more sophisticated digital services.
Sales staff at Janalakshmi Financial Services, a leader in the microfinance industry in India, use tablets to seek out and enroll customers digitally at consumers' homes. They make extensive use of biometrics at different stages of the loan disbursement and collection process. Accenture helped JFS introduce robotics to improve process efficiency more than two years ago and this has resulted in dramatic improvements in turnaround times and accuracy levels for the bank.
Offerings that reduce waiting times, increase options without raising costs and leverage big data and artificial intelligence that can crunch more information than the human mind are game changers. As it stands now, many digital natives probably have never written a check or have even seen a savings account passbook. While they may have stood in line at a bank, chances are they would question the need for such a time-wasting exercise. These are the customers who will ultimately view mobile, online and video services as bare minimum requirements.
Robotics is the way forward, not just to keep customers happy but to satisfy shareholders by impacting the bottom line with efficiency-boosting services. Asian financial services companies, which typically do not have legacy information technology systems dogging progress and that have digitally switched-on customers, have an opportunity to lead the way.
Alex Trott is managing director and head of distribution and marketing for Asia-Pacific for Accenture Financial Services. Piercarlo Gera is the group's senior managing director.