Transforming Complaints Management in the Banking Sector with Artificial Intelligence: A Paradigm Shift

The digital age has seen a growing shift to online banking. Mobile banking has also become increasingly popular. On the one hand, this has made customer interactions more convenient. On the other hand, it has also created an expectation of seamless, personalized service.

Complaints management is one area that is particularly ripe for improvement — and AI is the perfect candidate for the job. Let’s consider a few of the top areas where artificial intelligence has the potential to revolutionize how financial institutions handle complaints.

The State of Complaints Management in Banking

Complaint management in banking is a confusing and complex activity. Inefficiencies abound as multiple departments attempt to communicate and collaborate to address complaints manually.

In addition, the ability of consumers to use digital tools to provide feedback has only amplified the number of complaints received. This traditional approach to complaints management is infamous for creating delayed results and dissatisfied customers.

How AI is Influencing Banking

The arrival of artificial intelligence in the finance sector has already made waves. Things like machine learning and natural language processing (NLP) are busily transforming the industry for the better.

AI can process data at breakneck speeds. It can also recognize things like patterns and languages faster than its human counterparts.

5 Ways AI Is Transforming Complaints Management in Banking

Let’s take a closer look at five ways AI is already having an impact in the banking sector.

1. Using NLP for Efficient Communication

The ability of NLP to streamline natural conversations with human customers has transformed the communication process. Computers can now engage with customers, providing real-time understanding and nuanced responses — including escalating to human agents when necessary.

2. Employing Predictive Analytics

Consistent patterns and trending complaints are easy for AI to discover. Through ongoing predictive analytics, AI systems can use past data to predict future complaints — such as trouble depositing a check on a mobile device or technical glitches at an ATM — and provide pre-prescribed solutions.

3. Personalizing the Customer Experience

The data-backed power of AI makes it possible to breathe an unprecedented degree of personalization into each customer interaction — including complaints management. Things like segmentation, preferences, and communication styles enable AI to provide unique, tailored solutions.

4. Enhancing Regulatory Compliance

Regulatory compliance is always a priority for financial institutions. AI makes it possible to identify and flag regulatory-related complaints, escalating them for immediate attention.

5. Improving Through Data-Driven Insights

Along with predictive analytics, AI also has the ability to use past data to improve future banking experiences. In the area of complaint management, it possesses the capability of using data to discover the root causes of complaints and then create iterative solutions for future improvement.

An AI-Driven Complaints Management Success Story

To illustrate the impact that AI can have, consider an example put forward by Vijai Shankar, Vice President of Product at the AI-native company Uniphore. According to Shankar, technology allows an unprecedented degree of accuracy and consistency across the complaints management process.

Shankar specifically highlighted a global wealth management firm that complied with legal procedures and regulations by using AI. This allowed the company to:

• Monitor 100% of all customer interactions (up from 4-5%).
• Ensure sales associate compliance with regulations and requirements.
• Improve sales performance.

The result was a 15% bump in sales effectiveness and a halving of the effort for auditing compliance.

Key Considerations When Integrating AI Into Banking

While AI has near-infinite potential, there are many elements that come with integrating it into a traditional banking structure. Here are a few top things to consider:

• Data quality must be kept accurate, up-to-date, and integrated across all banking systems.
• AI ethics should be a priority — including informing customers of when they are interacting with AI programs.
• Human-AI collaboration training is required to help both entities work seamlessly together.
• Scalability and security are key, as the number of complaints and ongoing digital transformation can vary.

The ROI of AI in banking is attractive. However, leaders must keep these elements in mind if they want a rapid transition to AI solutions to be safe and effective.

The Importance of AI in Compliant Management

Complaint management is a vital part of the modern customer service department. The team at EY has found that AI is often (though not always) a solution to improving complaints management. Here are a few of the most effective ways to do so:

• Communication bottlenecks: AI algorithms can categorize complaints and prioritize them. They can also route them to the right team members based on their complexity and urgency.
• Inconsistent experiences: Human interactions are inconsistent and lack standardization. AI uses NLP to provide consistent interactions that can match customer preferences and communication styles.
• Manual processes and constraints: Manual intervention is restricted by time and resource limitations. AI is capable of providing ongoing, automated workflows.
• Data processing: Banks generate a lot of data. AI is able to process and manage that data infinitely better than humans ever could.
• Regulatory and compliance concerns: AI can monitor for and follow regulations at all times and with intimate detail, allowing it to adhere to strict ethical standards.
• Avoiding delays: It takes time for complex complaints to escalate and resolve. AI streamlines that process, avoiding unnecessary delays.
• Scalability: As complaints and customer expectations increase with digital tools, AI can handle the growing workload without concern.
• Data siloing: It’s easy for human workers to silo data in specific software or departments. AI can maintain comprehensive data availability throughout all decision-making.
• Insights and improvement: AI has the ability to consider past data and come up with predictive solutions to reduce their likelihood in the future.
• Customer loyalty: Efficient and effective complaints management by AI can improve customer loyalty and enhance brand reputation.

The banking sector is in the midst of a world-shaking transformation. As digitization continues to evolve, the introduction of increasingly sophisticated AI solutions is an inevitable next step for financial institutions across the globe.

By harnessing the capabilities of AI, banks can revolutionize their activities — including in the key area of complaints management. It is an essential step with clear advantages that every leader in the banking world should have on their radar moving forward.