National Australia Bank will roll out “virtual bankers” to perform tasks previously completed by staff in call centres, as part of a wider overhaul of its processes expected to net the lender hundreds of millions of dollars.
With banks using automation to cut costs and save customers time, NAB is launching a “chatbot” to deal with common administrative questions in its business banking arm, and there are plans to roll the technology out more broadly in the bank.
The chatbots allow up to 200 customer queries to be answered by a computer, rather than a human, and they are initially being trialled handling administrative questions about business credit cards.
By 2020, NAB expects it can save up to $16 million through the chatbots in its business banking arm, because of the sheer volume of calls it receives about relatively simple matters.
It is one example of the changes being pushed through by a high-level program to revamp how large parts of the bank manage products and deal with customers, amid a looming threat of disruption.
Chief operating officer Antony Cahill said the program, which the bank calls “customer journeys,” had the potential to deliver significant revenue and cost benefits over the next four years.
“This is hundreds of millions of dollars of opportunity. There’s a lot of work to do and we’re ambitious, but this is the goal that we’re setting for ourselves,” Mr Cahill told Fairfax Media.
Mr Cahill said automated services such as chatbots “will definitely become a broader part of the service experience that we offer all customers”.
Changes such as rolling out chat-bots also have the clear potential to displace jobs.
NAB chief executive Andrew Thorburn last week predicted “very significant job displacement” across some industries and professions over the next five to ten years, though he was speaking about the entire economy, not NAB specifically.
But Mr Cahill played down the extent to which staff may be worried, instead saying such changes could free up bankers to speak with clients or work in other ways.
“We can free up a banker’s time and say: ‘you no longer have to do that task, but you get to have conservation with your customer, or you get to think about designing new products or services,'” Mr Cahill said.
Banks also maintain the move towards greater automation is not only about cost-cutting. Mr Cahill said there were some simple administrative matters where customers preferred “self-service,” which is available around the clock.
“One thing that our customer research is very clearly telling us is there is a strong preference for self-serve, particularly for those types of activities we refer to as low-value from their perspective.”
While NAB’s chatbots respond to written questions, such technology will likely be applied to voice-based “digital assistants” such as Apple’s Siri or Google Home.
As well as cutting costs, the “journeys” project has the goal of increasing the banks’ net promoter score – a survey measure it uses to benchmark its performance in the eyes of customers.
Anne Bennett, NAB’s executive general manager of business transformation who is overseeing the “journeys” program, said teams were aiming to lift relevant net promoter scores by 15 points over a three year period.
“In an industry where sentiment is often quite negative, that is a big shift,” Ms Bennett said.
Ms Bennett said the program had so far produced the equivalent ot $27 million a year in cost savings through banker time saved, and from other changes such as moves to cut out the number of paper statements sent in the mail.
NAB is not the first bank to use chatbots, but it claims to be the first to use them in business banking, where it holds a dominant market position.
The push among banks to overhaul their vast bureaucracies is taking place against a backdrop of digital disruption. Technology-based businesses with much more flexible organisational structures are eyeing off the sector’s hefty profits, and banks are under pressure to slash how long it takes them to respond to customers or change their products.
While it historically took about 200 days to make a significant change to a product or system, banks are now trying to do this in about 90 days.
“The cycle of change is ever increasing,” Mr Cahill said. “How do you ensure you are prepared for the digital age? How do you mke your whole system agile enough to continually change in its role?”