Published on in Financial ServicesInnovation

Digital distribution models have revolutionised many industries and created hugely successful digitally led brands – consumer ‘digital champions’. Amazon, Google, Facebook, Apple and Uber are just a few examples.

These organisations have all used digital to put themselves in between traditional suppliers and consumers. From this trusted position they’ve completely disrupted the downstream value chain.

Suppliers that previously could evolve slowly and control the pace of change in their markets have faced the stark reality that consumers are now firmly in the driving seat.

Costs are being driven out, margins reduced and automation applied. At the same time services are becoming far more personalised and niche – something that is difficult to achieve when you are trying to take out cost, unless your operation is already significantly digital internally as well as externally.

Digital has already begun to disrupt the insurance industry with the rise of the aggregators. Initiatives such as the revised Payment Services Directive (PSD2) and open banking are about to do the same for the retail banking world.

New technologies driving the change

Ignoring the rise of digital champions for a moment, there has already been a massive change underway across all areas of financial services, enabled by a large number of new technologies.

These changes have been led by the introduction of new digital channels. Arguably the first of these was the humble ATM, then the consumer internet and more recently the explosive growth of mobile computing.

Since then we have added other technologies such as analytics, blockchain and the internet of things (IoT), but it’s the digital channels that have led the way in the evolution of the industry.

Even now these digital channels continue to evolve at pace. The ATM, for example, has grown into an omni-channel-supporting self-service terminal, offering a large number of highly personalised and contextual services.

Mobile computing is the one digital channel that has actually brought a new model into play beyond being simply a mobile digital interface.

Mobile devices like smartphones are not just a way of checking your balance on the train or entering the details of an insurance claim at the scene of an incident.  They are devices full of sensors and different types of interfaces – the first realisation of the promise that IoT brings.

That means I can use my smartphone to record my driving style for insurance purposes or as an authentication device for my bank account using a number of different built in functions – fingerprint reader, location, camera and so on.

The smartphone is a complex human-centric device, which goes way beyond the traditional keyboard and screen digital interface.

Its success is mostly down to its functionality and multitude of interfaces and sensors. It also gives a pointer to the next frontier of digital disruption in the financial services industry – human-centric Innovation.

This is the battle ground on which traditional financial services companies will win or lose the hearts and minds of consumers.

Financial services: ripe for disruption?

This is something that is already clearly recognised by the aforementioned digital champions, many of whom are already eyeing up financial services as the next target ripe for disruption, pushing themselves between the consumer and the downstream value chain.

Apple pay is only the start!

Consumers increasingly vote with their feet. Relationships with suppliers that used to last years are now lost in the blink of an eye, and digital only enhances that trend.

Consumers expect value. Not just low prices, but  excellent customer service, personalised experiences and immediate gratification. They also want to be treated as a human, not just somebody to take an order from and deliver to.

In the past this type of personal service based value was only ever achieved through a heavily people-centric delivery model – something that does not easily work in the digital world, and something that is typically costly to provide when done well.

The future is personalised

Human-centric innovation aims to deliver technology-based solutions and services that are personalised and focused on people, while at the same time benefiting from all that digital brings.

As an example, Fujitsu has just announced a solution that can use conversational speech to identify customer satisfaction, enabling automatic response in customer interactions in various situations.

This isn’t just about the words used. Often people will change the way they speak before they actually tell you they are unhappy. We often pick this up when dealing face-to-face, and sometimes on the phone. But not always.  And depending on how we feel we may choose to ignore it anyway.

In these cases technology is more reliable, and can now in many cases be more perceptive. The applications of just this one technology are numerous – training, rapid supervisor intervention, employee performance evaluation and even supporting advanced chat bots.

Combining this solution in real-time with analytical feeds from multiple data sets also can help to improve the contact. If you know from data collected elsewhere that the customer’s mother has just died, for example, you could take a different approach to the conversation and any immediate support needed for the contact.

The technology that supports this type of interaction is complex. Fundamentally it’s a combination of analytics, artificial intelligence (AI) and different types of complex interfaces. Really all of these can be categorised under AI, making technology process and act more like humans do.

Attributes include, among others: complex and unstructured inputs, continual unsupported learning, and complex relationship analysis.

Technology also has the benefit of consistency of delivery – it should only get better, and faster – and real-time access to a lot more useful current and historical data than can be captured by the limitations of the human body and brain.

It’s no surprise though that much of the way of implementing this technology is built upon a basis of copying how the human brain works (with neural networks, for example).

The next frontier…

Human-centric innovation is the next frontier, not just in financial services but in other industries and areas as well.

Artificial intelligence is key to enabling this, which is why Fujitsu has more AI patterns held than any other company.

We have a growing portfolio of solutions and technologies to support this next frontier as well. Our human-centric AI Zinrai brings together and systematises the fields of sensing and recognition, knowledge processing, and decision making and support, as well as the learning and other AI-related technologies and knowledge generated by Fujitsu’s R&D.

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