I came across an article published in the South China Morning Post a few months ago about how China Merchants Bank have opened a branch in Shanghai ‘manned’ entirely by ‘smiling’ robots equipped with an array of facial recognition (FR), artificial intelligence (AI) and virtual reality (VR) capabilities. Beside the slightly surreal images in the article of people interacting with the robots, it really hit home to me just how close we are to these technologies combining to deliver the kind of services that many thousands of retail banking staff are already being replaced by. Now this may all be a clever PR stunt aimed to demonstrate how far we’ve come with these technologies, but just because we can do something, it doesn’t always mean we should. Which begs the question, if we are all being conditioned to self-serve through mobile banking apps and interface with virtual assistants, will we ever want to go back to interacting with a human substitute, either in Islamic banking or in many other industries?
China Merchants Bank uses a bot on WeChat to handle 1.5m-2m queries a day, a workload equivalent to around 7,000 human staff, and many people are already saying that they would prefer to engage with a virtual assistant powered by AI than a human being. The trouble with humans is that they are, well, human. In a lot of retail industries, service levels tend to be at the lower end of most customers’ expectations, and many fail to even live up to those. Usually you have to look to the higher margin categories, where quality, luxury, prestige and exclusivity are priced in to find a level of service that is truly focused on customers’ needs and preferences, but even here, AI is making advances into the wealth management sector and other premium financial services in leaps and bounds. And whilst the tech industries that disrupt everything from shop assistants to asset managers will continue to attract talent in droves, we are only at the beginning of this fourth revolution and there is unlikely to be enough talent to go round, and we are already seeing advanced AI skills commanding huge salary premiums in the global technology market.
The big challenge for the banking and financial services sector is how is it going to attract the kind of talent it needs to serve its future customers when the future for many roles is so uncertain? PwC’s recent UK Economic Outlook report confirmed what many in banking and financial services industry regard as inevitable, forecasting that between 2017 and 2033, AI will create 18 per cent more new jobs, but at the same time, displace 25 per cent of existing ones, resulting in a loss of 77,000 jobs in the UK financial and insurance services alone. The good news was that overall the displaced roles are expected to be matched by new ones, at 20 per cent on either side, but industries like manufacturing, wholesale and retail as well as transportation will be the hardest hit, along with financial services. The truth is that service remains king, but when everyone is delivering the same level of service, customer experience may well be the defining element of success.