“Creating art not only enriches our thinking, it also enables us to augment our empathy. When art and tech dance together, new amazing experiences become possible”, commented Isabel Van Mele, CIO at KBC group, on The Banking Scene Art Night and its after movie.

It summarised our intentions for November 20: “Augmented Empathy” was the theme that evening, which was full of inspirational discussions and a magical spark of Opera on Brainwaves. The reason for that theme is simple: I believe that digital transformation was about efficiency gains for too long. The ultimate goal is known before setting up the process, and choices are reduced to a minimum because choices = uncertainty, and the general belief is that uncertainty = dissatisfaction, risk and operational costs. Although these efficiency gains apply to both banks and customers, I don’t think it is enough.

Digital transformation was about providing banking services in the easiest and most convenient way. And that is a good thing. There is no reason to go back to the old days. However, there are many reasons to look back and evaluate how to evolve in creating the bank of tomorrow. That is what this evening was about.

Let me explain the effect of hyper-focus on efficiency with the words of our opening speaker, Ghela Boskovich: “Because everything is predetermined, everything is hyper-scripted, and there's only one outcome; it is meant to be efficient. And this is incredibly limiting. We think that efficiency is hyper-logical. That’s not necessarily the case. I don't believe that efficiency is the most logical approach in part because it misses empathy and emotional intelligence. Why? Because the outcome needs to take into account the contextual whole.”

Time to change the narrative of digital banking

Ghela advocated to look at effectiveness instead: “Effective is empathetic by design”. Putting effectiveness at the centre of decision-making, she said, will let you work within an ethical framework with empathy for the customers, the team, employees and investors.

Is that efficient? Maybe, maybe not, but it is effective. That effectiveness, making people feel you care, will increase conversion rates sooner or later, because people feel included in the bigger picture. The best measurement of effectiveness, according to Ghela, is the customer lifetime value.

Ghela: “Making choices about business models, business decision pricing, product service, all of that, based on an understanding of what other people feel. It also means that we take perspective from every facet of stakeholders, and shareholders, the investors, our employees, the customers, management, that we look at it through multiple lenses”.

She explained it by an example I will never forget: the mortgage loan. “Mortgage loans are a common and accessible way for individuals to finance the purchase of a home”, explained ChatGPT.

However, it is much more.

For the bank, a mortgage loan is a way to earn a return on deposits, while reducing the risk by having collateral to cover the repayment in case of a problem. It is also (one of) the biggest moments in life to tie a client into a longer-term bank relationship. Moreover, people with a mortgage may be wealthier clients as well, perhaps not today, but definitely in the long term. So it also represents future value.

The client sees the mortgage as a way to access a home, a very loaded word, explained Ghela. That house stands for security, stability, community, and family, a place to find peace, to meet with friends...

From a government perspective, the mortgage loan is a community builder. It brings together people who care about their homes and neighbourhoods. People with a mortgage sign an unwritten social contract with the community to live there, support the community, and help it flourish. They will be more reliable taxpayers as well, which supports education, infrastructure, and public services.

Effectiveness through augmented empathy will lead us to build better financial services and products because a proper understanding of context and the different dimensions involved will lead to more complete value propositions, which will lead to higher profitability.

Ghela: “If you design a customer journey with empathy, you design a product with empathy. And if you design the human intervention, not just the digital journey and the digital stuff, but how we intervene in the manual bit with empathy, then you drive profitability because, again, it goes back to customer lifetime value.”

Banks augmenting empathy

Are banks sufficiently balancing effectiveness and efficiency in their digital transformation roadmaps? Or it is time for them to augment empathy, and if so, how is that possible? That is what we spoke about in the panel with Bram Somers, CTO at Belfius, Isabel Van Mele, CIO at KBC Group, Bart Hamers, Director AI and Analytics at BNP Paribas Fortis and Melvin Brand Flu, Director Customer Success at TCS PACE.

The bankers proudly shared how much they listen to their customers to improve their understanding of how their digital development is being appreciated. KBC, for example, has 100 days per year of personal interviews, listening to 5 people per day. These interviews come on top of the more rational client surveys and NPS evaluations. Although that is a good start, it doesn’t tell us much about empathy in the process, but it shows that banks listen, especially the qualitative interviews.

Belfius has the brand promise that they love their customers. Bram explained that love is not just a fluid value but all about consistency and customer satisfaction. The bank has one main KPI: customer satisfaction for social media campaigns, strategic investments and product development.

Bart: “The whole digital interaction that we have now has become very transactional and, therefore, a lot less empathetic.” AI is an important cornerstone in improving customer contact, advisory services, operations, etc., but banks must also be there for people who risk losing out on digital, given the 46% of the population that is effectively at risk of being digitally excluded in Belgium.

Every bank representative in the panel acknowledged the power of branches in that respect. Unlike the Netherlands, a bank in Belgium without branches will have a hard time building sufficient scale, because it misses effectiveness and the contextual considerations of the Belgian market.

Banks acknowledged that the constant availability of bank services may have a negative impact on emotional perception in banking and insurance. Melvin Brand Flu explained that nicely: banks should look more at “Time well spent”: if customers expect things to work seamlessly, and they don’t, that creates friction. The problem cannot be solved immediately, and that is not time well spent. Melvin argued that banks always expect their customers to have empathy with them, but these banks should also show more empathy with their customers. A relationship is a two-way street, and technology is there to facilitate it; it is just a matter of implementing it with empathetic considerations.

With KATE, KBC Bank had a personal and virtual assistant before the hype of ChatGPT. It transformed the way digital banking interactions work; it became “bidirectional”, as Melvin explained it. Suddenly, it is no longer the client reaching out to a machine but also the other way around. Isabel shared that every day, KATE has 3 million interactions with their clients. It is a good example of taking all the good things of the recent AI hype and flattening the elements that harm trust to have a compelling, empathetic model to talk to customers.

“When you bring ethics and empathy and emotional intelligence into an organisation and into the product design and product delivery, and the user journey, we get effectiveness. That's what we should be aiming for”, said Ghela, and how contextual that is, is what we learned from Gabriela Giannattasio, VP EMEA at Veritran, who talked us through some of the learnings about the South American market.

It was revealing to hear that in some markets, personal wishes are also influenced by mobile reachability, which, in turn, determines the architecture and design of a mobile app. Gabriela showed the importance of talking the same language to your customers and allowing them to share experiences and how they feel about the things you build as a bank.

Conclusion

As an intro to the Grand Finale, the Opera on Brainwaves, Jasna Rokegem, the superstar behind this Fashion Tech experiment, shared: “No matter if you're a man or a woman, if you believe in God or a Buddha, we all know how it feels, to grieve, and to be sad, because we lost someone. We all know how it feels to fall in love for the very first time and to feel those butterflies in our garden. Emotions are the language we all speak and understand. It is what unites us as human beings on this planet.”

That universal language is what we all felt during the transcendent performance of soprano Emma Posman and harpist Marianne Hofman, as you can witness in our after-movie.

After seeing the reactions of the audience and speaking to people afterwards, I left feeling hopeful about the possibility of a more empathic future of banking, and I cannot wait to learn from next year’s conferences on “Transforming the Rules of Engagement” in Luxembourg, Amsterdam and Brussels.