The expected progress in Artificial Intelligence has made Finnish bankers like Reijo Karhinen, the CEO from OP Financial Group and now Casper von Kuskull from Nordea (these are the 2 largest banks here) express their concern on how their organizations can live with the current AI advances, which are becoming a challenge to their work force and the businesses of banks and within the financial sector in general.
These firms are under significant pressure to consider how to best, with the support of AI, big data other new solutions, organize their services in general. One specific area of interest, of course, is how to reach, serve and keep the consumer-customers with relevant offers and services.
Many think that Machine Learning (ML)–based, tailored services will, in the very near future, almost now, perfectly match individual service needs and even anticipate them. While this may well be so in simple circumstances, the banks should not forget the real, intimate human life, something that only the customers know and care about.
Even with the best AI systems, helping the banks to guess what people may want, the number one priority of human beings and their families is not and will not be for managing and handling loans, accounts, mortgages, or other financial services. Instead, they want to live a predictable, enjoyable and safe life, have good homes and regular salary, make plans and discuss them, build trust on their own economy and many other everyday aspects of living. People can be helped and served in living with these everyday challenges but most of them don’t want to be critically dependent on banks and bankers.
If the future AI, or other technological service systems, fail to serve this human purpose they will only offer Machine Stupid (MS) disturbances to their clients, familiar to what we all experience today trying to make a simple phone call through an answering system asking us stupid questions and playing the wrong type of music while we desperately want to get our message through.
Then there is, the almost but not quite, science fictional possibility that financial organizations will try to make us their hostages for life.
At a recent seminar panel at Hanasaari Swedish-Finnish Cultural Center in Helsinki the participants, e.g. Casper von Koskull from Nordea, Professor Bengt Holmström from MIT, our Nobel laureate, and other specialists from various consultancies seemed to agree that Finnish and Swedish research and the use of AI in the present, hard global competition is at risk of lagging behind the toughest international competitors.
This may well be true, although both Sweden and Finland have rather promising academic-technological background (e.g. AI, pattern recognition) in the 1980’s and in the 1990’s and even at the turn of the millennium. Today, many things are different, especially within the global AI R&D and business. In Finland, higher education policy has not made it easy to follow or remain at the front of these developments.
Sara Öhrwall from Mindmill Networks paid attention to the AI-intensive activities of the usual suspect-giants Amazon, Apple, Facebook, and Google, especially to the extent and speed by which they are doing research and acquiring promising firms within the AI realm – adding the developments in China to this. (see the Swedish language newspaper Hufvudstadsbladet (HBL), 20th October 2017). The future competition could not be harder than with this group of players.
Reading about the comments from the article in HBL, there hovers, among the bankers, the familiar fear of losing the race, but also the typical way to search for the solution: technology, computation, please help us! “Big data and tailoring”, “One size does not fit all”, “Tailored communication to individuals”.
These are familiar suggestions we have heard already in 1990’s, when the first Internet promises emerged. Interestingly, Professor Holmström warned us at a seminar about trusting in money in the search for solutions: investing big sums in innovation is not always the way to go about it, unless there are other drivers. It is sometimes useful to be faced with limited resources for innovations to thrive – hence “Money makes us lazy” was his reported comment, referring to the attitudes of the famous Steves – Jobs and Wozniak, from Apple. Other motivations and conditions are needed.
But does the straightforward trust in technology, computation, and big data mean there is no risk of being lazy in innovating? Nokia, where Holmström was a board member, for example did have solid technological networks, but its breakthrough was not made possible by the technology alone. There was also a combination of the technological advantage and the superior user interface that it was able to offer at the time, something its competitors could not do. The user interface advantage lasted longer that the technological one. Then Nokia lost the game, especially because of the degradation of the human-technological, combinatory advantage – and many other non-substance failures.
It is plausible that with the wide use and coverage of AI in services the situation will not be very much unlike it was for Nokia. Banks are not exceptionally good in intimately knowing their customers or caring for them, but they could be. They have a strategic position in our lives, more so than many of us wish. If they understand the real risks, that is, losing us to alternative future financial service operators, they would be wise to try and better understand what they could accomplish together with their clients.
There is the lure in the banks to be fully and comfortably engaged with technological-computational-AI service development activities, which cost a lot, while at the same time being lazy with human-centric planning, design and offerings, which would be relatively inexpensive even with reasonable investments. The latter can have a huge value in return if it is innovative and ahead of the competitors. It is something where the Nordic countries, especially Sweden, could be world leaders and Finland should take lesson.
How can you supplement the unavoidable AI solutions, with a human touch, in order to reach the heart and soul of the individual and family clients and why not even firms and their people? While I am not dealing with business customers here, they are not that different, only their service needs and ways of working and partnering with banks vary, in good and bad. In the following, I offer a few human wake-up calls to find the human being the banks call their customers.
Some of the ideas are based on a conspicuous observation I’ve made during the recent era of big data and its computational promise: there has been an increasing neglect of the possibilities to directly ask people and trust their words, or otherwise let them express their own, on-going intentions and actions in the way they prefer.
Instead big data systems try to guess, and yes, they can be successful on many occasions, especially in trivial and stupid ones, but missing the most valuable, everyday human instances and episodes of life. People themselves do not miss these human and social instances of life – they are the essence of everyday living. So, here are some human-centered thoughts for the banks and other service developers to consider, on combining AI with valuable, subjective human knowledge and initiatives:
– Don’t try to guess the most intimate feelings, wants and wishes of people, instead find a (technologically supported) way for the customers to express them and their ongoing interests, motives, intentions – any time it is relevant to them, in a way natural and accurate to them, at a long range or short range in space, time or both. Trust is crucial. Unlike it is often claimed, people typically don’t make mistakes in expressing their honest and relevant feelings and intentions, which AI systems can easily miss.
– Don’t disturb people’s sensitive mental states and situations. It is difficult to guess when such an occasion occurs in life, but people can tell and express it easily, without any effort, if allowed to do so. It’s like opening and closing the personal window of access – people are the best experts in doing it.
– Make it natural and easy for people to approach you, with the help of modern means, when it suits them, and be careful in approaching them. A perfect contact comes from a client whose motivation emanates from his or her own life and the timing and way of interacting is under her control. It is most valuable to recognize these instances. No market push can beat this
– Learn to listen to the real wants and needs of people. There are a plethora of them and they are not only “cognitions”, “emotions” or “preferences” As an extreme example, knowing that someone is “Interested in buying a car and having money for it”, is not the same as knowing that someone is “Desperate to buy a car as soon as possible”.
Some years ago, I introduced the concept of Internet of Behaviors (IoB), a cousin of IoT. I tried with my colleague to get a number of firms and operators, even Tekes, interested in it, but it seemed too complex, unrealistic or just uninteresting to them. However, the idea is simple, you can read and perhaps be inspired by it from the following two, longish blogs (conceptual introductions only), which explain the thinking: how to design a way for customers to express their readiness to be approached.
There are numerous potential service channels available for this and their role varies depending on people’s life situations. In order to build this bridge between firms and people, the ongoing (mental, physical) behavior of clients or potential ones must be known, something that AI systems often try to guess and know and can help with but cannot be perfect and easily risk disturbing people. Typically, AI and big data analysis operate from the firms towards people while IoB operates from people to firms.
These human aspects are by no means exhaustive, but suggest an alternative approach for the banks and other services, facing the AI invitation and lure and now crying “technology, computation, come and help us!”.
Blogs on IoB:
Internet of Behaviors (IoB):
Psychology behind IoB: