How new technology is reshaping your local bank…and how it isn’t
By Dustin Waters
Ever since the first ATM in America was installed in 1969, automation has shaped the way U.S. banks do business. But, with artificial intelligence continuing to advance at a blinding pace, are we fast approaching a day when personal banking rarely involves another person? Not exactly.
According to a 2015 article by MIT economics professor David Autor published in the Journal of Economic Perspectives, the number of ATMs in America quadrupled between 1995-2010. But while one may have expected the number of bank tellers to have taken a major hit during this period in the U.S., their ranks instead rose modestly, increasing by around 50,000 between 1980-2010. As Autor explains, “Increasingly, banks recognized the value to tellers enabled by information technology, not primarily as checkout clerks, but as salespersons, forging relationships with customers and introducing them to additional bank services like credit cards, loans, and investment products.”
In 2017, Wells Fargo established a team solely dedicated to developing new AI technology and practical applications to safely assist customers. One of the areas where the financial giant first deployed AI was fraud protection for credit card customers.
Chuck Monroe is the head of AI Enterprise Solutions for Wells Fargo, and he recognizes that artificial intelligence is still very much in its early years.
“We need to be thoughtful about how we are going to leverage artificial intelligence across the company, and do it in a way that makes sense for both the customer as well as the company,” says Monroe. “That’s why we created the Enterprise Solutions team to really look across the firm, to understand who is doing what in this space already.”
One advancement available to Wells Fargo customers is their Intuitive Investor, a system that uses AI and advanced analytics to suggest investment strategies and help customers manage their money. Soon the company will be rolling out a pilot program that will utilize automation and AI to help customers navigate the home-lending escrow process.
For Monroe, AI allows Wells Fargo to create a personalized experience for customers using data shared by customers. While the technology isn’t quite there yet, he sees a day years down the road where each customer has access to their own virtual assistant that can provide financial assistance from an “end-to-end perspective.”
“I think that personalization is absolutely where we have to go to continue to be relevant because it’s becoming an expectation for consumers,” says Monroe. “It really started when you think about Amazon and Netflix, and in the financial sector, we’re headed right down that same path in creating those same personalized experiences.”
Let’s look beyond a financial institution with 119 banks and 345 ATMs across South Carolina and turn our attention to a community operation, the Bank of Travelers Rest. The Upstate bank maintains a careful hand when implementing automation, but also knows when it’s time to upgrade. In 2018, they put a text alert system into play to notify customers of potential fraudulent charges on their accounts. Up until that point, the best customers could hope for was a call on their primary phone number, but as smartphones became more and more ubiquitous, the quickest way to reach customers changed. Recognizing this, the Bank of Travelers Rest changed with it.
With that in mind, the Bank of Travelers Rest is focused on not becoming so automated that they lose the personal touch that customers expect. According to Eric Wall, vice president and marketing director for the Bank of Travelers Rest, this direct human connection can serve as an effective deterrent for fraud as bank employees from tellers to the call center can build personal relationships with customers and know when something isn’t quite right with their accounts.
“So many parts of banking still need to be personal, in our opinion. Yes, we want to provide the products and services that our customers need so that the technology is there for them to access their funds like they would do with one of the larger national banks,” says Wall. “But at the same time, what gives us that advantage is that we do have that personal relationship with our customers. We want to take that time with them, to know them, understand them, how they do business, how they want to conduct their financial business. That way we can work together. You cannot replace that human ear.”
Bank of America installed its first ATM in September 1969, the same month such a device was introduced to the U.S. Less than 50 years later, the bank would begin testing its first employee-free branches. While this move displays a strong endorsement for automation, Upstate Market President Stacy Brandon suggests a pilot program of personless financial centers is just part of Bank of America’s full approach to customer service.
“Our strategy really is two-prong. It is high tech, but also high touch. We’re focused in both directions. We have about 4,300 financial centers across the country. What we’re trying to do in those centers is bring both of those concepts to light,” says Brandon. “You’ll see in the financial centers and separate from the financial centers very advanced ATMs, for example. All of our ATMs now are cardless, so you can authenticate yourself with your phone rather than dial in a pin at the ATM. That’s the direction we’re headed in.”
In the past 18 months, Bank of America has rolled out Erica, a fully virtual financial assistant that is available 24/7. With Erica, customers can ask questions over their smartphone and request transfers. Erica will also track spending habits, monitor your credit score, and let customers know if they are spending more than they are depositing. If you want a blended experience, customers can meet with human digital ambassadors at Bank of America financial centers who will walk them through these capabilities.
“It’s a balance. Obviously, we still feel it’s really important to have a financial center network in our markets so that people who don’t feel comfortable on a digital platform have a place to come and sit down with somebody. That is always an option,” says Brandon. “Some people might feel more comfortable calling and talking to someone over the phone. We offer that channel as well.”
Bank of America utilizes AI to track customer complaints and concerns, so that they can better allocate resources. They have also partnered with the Kahn Academy to create Better Money Habits, an online program that provides financial literacy tutorials for customers and non-customers alike.
Bank of America is also partnering with Harvard to establish a council focused on studying AI and ensuring that this technology moves forward on an ethical basis. This reflects an effort to utilize new technology responsibly and cautiously, while growing along with South Carolina bankers and local bank employees.
“There’s just not as many [bank tellers] needed as there would have been 10-15 years ago. What we’re doing is redeploying our people into more specialist roles,” says Brandon. “What you’ll see us doing over time is, even though technology is helping us and we don’t need so many people in one role, what we’ve been doing at Bank of America is adding more and more what we call client-facing people, whether they are mortgage specialists, small-business specialists, or what we call our Merrill Edge financial advisors that are in our financial centers.”