The robots are coming to banking – but a human touch is still necessary for now

Banking automation will make many customer service and processing jobs in this sector obsolete.

It's no secret the future of banking rests in the realm of automation and fintech. Banks are investing in cutting-edge technology to remain competitive and meet customers' growing expectations for seamless and immediate transactions. Citi estimated this acceleration toward automation will end up eliminating 30 percent of banking jobs between 2015 and 2025.

Despite the banking industry's trend toward trimming the role of humans, however, people will continue to play a crucial role in this sector, and some even see them playing a more important role than ever before.

The rise of the robo-banker

Credit Suisse recently introduced Reggie, a virtual assistant similar to Amazon's Alexa, according to Institutional Investor. For now, Reggie's job will be to answer regulatory questions and provide answers to basic financial questions. As one of 20 robots working for the international investment bank, this automated advisor will continue to play a growing role in the institution's processing and customer service, and the company anticipates it will reduce calls to its contact center by 50 percent. 

"Banks will become fintechs or they will go out of business."

Other bank leaders see the writing on the wall as well. Both the Wells Fargo CFO and Morgan Stanley CEO said robo-advisors will be a must-have to complement their sales forces, Bloomberg reported. The simple fact is banks will become fintechs or they will go out of business.

To gain better insight into the future of technology in the financial industry over the next 10 years, Business Insider surveyed the brightest minds in fintech, including chief technology officers, chief innovation officers, startup founders and venture capitalists. The source asked everyone the same question:

"What is the one thing that is going to change finance as we know it in the next decade?"

While answers varied from one person to the next, there was general consensus that automation technology will dramatically upend traditional financial processes.

In response to this surging demand, fintech startups responsible for building the bank of tomorrow attracted $22.3 billion in funding during 2015 – a 75 percent increase over the previous year, another Bloomberg article reported. These companies are building the technology – robo-advisors, blockchain algorithms, risk-assessment platforms for loans – that will fundamentally alter the banking landscape.

What role will humans play in banking?

Despite significant advancements in financial automation, there are still some functions that will require human interactions and responsibilities. From clients who prefer to work with a human being to technicians needed to service technology, people should remain an important part of the finance landscape, albeit in very different roles than in the past. For instance, risk and regulatory experts will still need to be employed, but their expertise will be used to train the AI.

Automation will drastically alter the way financial companies loan and invest money, insure property, assess risks and even write research reports. Banks will re-align the workforce and focus more on technology hires and less on customer service. In the near-term, mobile apps and online portals will replace a sit-down conversation between clients and their personal private bankers, as the next generation banking customer is going to expect and demand a seamless interaction with technology and less time with an actual person.

As fintech evolves, deeper machine-learning algorithms will further minimize human involvement in more complicated processes such as loan underwriting and capital investment. Eventually, by leveraging behavioral data and robo-advisors, there will be no need for bank customers to have any interactions with a human banking representative.

For now, most people are accustomed to walking into their local bank and interacting with a teller, whether it's to make a simple deposit or withdrawal, or even something a bit more complex, such as applying for a credit card or mortgage. Eighty-seven percent of respondents to a recent Accenture survey said they still use their local branch and prefer human interaction. However, as fintech becomes more advanced and ubiquitous, customer adoption rates should increase exponentially. 

However, speaking with Business Insider, Bu Lo, cofounder and CEO of online investment manager FutureAdvisor, noted that as technology continues to handle the more mundane aspects of traditional banking processes, such as risk assessments and customer service, human financial advisors can focus on even more personalized services according to client needs, such as mentoring or coaching.

As financial institutions continue to implement more automation throughout nearly every process, these companies will still need to differentiate themselves and deliver value to clients. A human touch can serve as this differentiator, but the window of opportunity for this to make a difference grows shorter with every passing year.

With the outlook of banking looking more like it will go the way of an invisible white-label service, human interaction might be solely limited to writing and training sophisticated AI programs and algorithms.