Chatbots challenge: the cost of AI customer service

Handelsbanken Insights Blog

By Chris Teasdale, Chief Branch Officer

Published: 10 October
Reading time: Three minutes

What do you think of chatbots? Do you get annoyed when you need a problem solving but you can’t get to speak to a real person to help? Our research has found that more than three-quarters of people want to speak to a human for their financial decisions, but too many end up battling an automated phone menu or speaking to a chatbot. Our Chief Branch Officer Chris Teasdale looks at the findings.

If you’ve interacted with customer services recently, you probably dealt with a chatbot. According to Department for Culture, Media and Sport statistics, two thirds of people deal with one every quarter, with 40% speaking to one in any given month. Government figures show 68% of companies now use AI in customer service.

But there’s a problem; people hate them.

Although chatbots can enable faster, more responsive interaction, we wanted to understand public attitudes to automated service, so we

commissioned independent nationwide omnibus research

. The results were conclusive; the public overwhelmingly wants to deal with humans.

Key stats from our research

Seven out of ten people said they would rather deal with a person than an automated system
When it concerned their finances, this rose to 75%, and;
When it was regarding “something going wrong” it was 76%
A third had ended the conversation without resolution
One in five had shouted at the bot, one in eight admitted swearing at them.

Most crucially, customers are being driven away. Almost half said they had switched providers, cancelled a product or service, or simply decided not to deal with the company any more. For financial services alone, the average amount lost to the company was £1,600 per person. Scaled up nationally that would mean £9.3 bn in lost revenue – just to banks.

The hidden cost of automation in financial services

Automated systems save time and money, and there are many reasons customer-facing companies might want them. Equally, not everyone demands personal service, and even those who value it may not need it for everything. The development of AI in particular has opened up new possibilities; computers can do some things better than people. For crunching large amounts of data, or repeatable, scalable tasks, automation will eventually win.

But until now, savings have been the only story – there have been few attempts to measure the cost, whether in business opportunities or the impact on the bottom line. There is clearly a place for automation, but where should we draw the line?

The crucial element is empathy. Our research suggests people want to know that the business they are dealing with is invested in the relationship. Invested enough to want to resolve their query or complaint, not to divert them into a digital void. We’re all familiar with the cliché of being told “your call is important to us” whilst no effort is made to demonstrate this is true – this showed there are financial consequences.

Relationship banking

We’re proud that at Handelsbanken, we work hard to provide relationship banking. Each branch makes the key decisions and handles all aspects of our customers’ banking locally, and customers know they can pick up the phone and speak directly to their dedicated account manager.

Many technological innovations have changed business. The development of the National Grid electrified the workplace in the 1930s. The telephone, the personal computer, and the internet all marked further paradigm shifts in how companies deal with customers. Artificial intelligence will doubtless enable greater steps forward. But technology should complement, not replace, the human touch. The ultimate lesson from our research seems quite simple: when it comes to doing business, your customers want to know you care.

Read more: What is relationship banking?