Humans to remain a key part of financial services in the future

AI to have biggest impact in financial services, but advisory services will still require human interaction.

Technological adoption and use will continue to advance in the financial services space, but human interaction will remain an integral part of customer journey in the near future, banking leaders said in a panel on financial services’ future during the Singapore Fintech Festival x Singapore Week of Innovation & TeCHnology (SWITCH) 2020.

At the very minimum customers could expect to be seamless, invisible, intuitive in their access to all kinds of financial services, DBS Bank Chief Executive Officer Piyush Gupta said on how financial services will develop in 2021 and beyond. This development will be made possible as financial institutions adopt and refine their digital technology platforms and systems in the coming years.

Demand will be driven by customers’ becoming more comfortable with using digital financial servicing platforms—a trend further accelerated by the onset of the pandemic in 2020, Gupta noted during the panel that includes Standard Chartered Singapore CEO Bill Winters and Calvin Choi, CEO and chairman of Hong Kong financial institution AMTD.

Despite this, it is still expected that human interaction will continue to play “a very substantial” role in the financial services space, especially in the areas involving trust and advisory, according to Standard Chartered’s Winters.

“My forecast would be well after the point where the robo-advisors are able to give consistently better advice and human beings, customers will still want to talk to a human being to validate their views. They want the intuition on top of the output from the machine,” Winters said.

For Winters, the future for this space will be a marriage of technology and human advisors. “More and more that means that we've got to use AI and associated tools to enrich the qualities of our advisors, and that the advisors themselves will put the final stamp of approval in one way or other or give that reassurance that a customer needs.”

The past few months saw a rise in digital adoption amongst banking consumers, the panel noted. In DBS, for example, Gupta shared that the fastest growing population of digital users in last six to eight months were those aged over 60 years old, the so-called "hold-outs" who were initially skeptical or reluctant to switch. This was followed by growth of users from migrant labor or the underbanked, and digital supply chain customers—SMEs.

“None of this is because technology got newly developed,” he said. “It is because people's psyche changed people's willingness to accept new forms of work change. And as we look back, we will think of 2020 as the seminal year where you saw a profound change in the pace at which people adopted stuff. And as a consequence, obviously, it will transform the way work gets done as we go forward.”

Competitions and partnerships
Amongst areas of digitisation, artificial intelligence (AI) was named as the technology that will have the biggest impact in the financial services industry in the next five years. This is one space where Gupta alludes that the gap between leaders and laggards will be hard to bridge.

“To get AI, right, you got to not only have the infrastructure, the culture, the data scientists and so on, but you need to have the core raw material—which is data—to clean up the data and have the data infrastructure in place,” he said.

It took DBS four years to do this, Gupta shared—and noted that this will not be an easy shift for a lot of companies to do, when asked on how they built their competitive advantage.

“Today, we have hundreds of AI models running in our bank, I'm not sure it's going to be that easy for people to play catch up on the AI journey,” DBS’ top executive said, who also named 5G, Internet of Things, and blockchain, as other key factors to note in the development of financial services in the future. “The trick with this is always to continue to stay ahead by leveraging and experimenting with newer stuff, even as people catch up with the basics.”

Meanwhile, Standard Chartered’s Winters underlined the importance of partnerships in setting up the bank as a disruptor and challenger in a number of markets.

Just this year, Standard Chartered rolled out its digital-only bank in Hong Kong, Mox Bank, in partnership with PCCW, HKT, and which involved building a brand new tech stack from top to bottom, according to Winters.

“The value of data and then the value of being able to digest and process that data in a way to provide your customers with a better product and service is the key differentiator, and from our perspective, that will in many cases involve partners,” Winters said.

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