Guest article by Tor W. Andreassen.
The rapid technological development within digitalization, automation, AI, and GenAI has changed the way we live, work, and interact with businesses and people. One main feature is that technology is replacing humans at a great pace. Within finance, global banks have eliminated more than 60,000 positions just throughout 2023, according to a McKinsey report.
Even though digital solutions like online shopping and platforms like Uber and Airbnb have undoubtedly made it more convenient to manage our daily lives, they have also raised concerns about the decline in human interaction. Robots serving food at restaurants, chatbots answering your questions, and phone trees offering you at least four response options are increasingly meeting customers as customer service departments are scaled down. ‘High tech’ has reduced the scope of ‘high human touch.’
A recent article in the Financial Times – ‘When your bank rediscovers the value of human contact‘ – pointed to a growing understanding that human interaction is still essential, especially for older customers who may not be as comfortable with mobile banking or online banking. In a study by Vanguard, they found that 93 percent of respondents preferred to either talk to an advisor (76 percent) or an advisor assisted by a digital solution (17 percent) when making complex financial decisions.
This ‘new’ interest in human contact in the digital age is a complex phenomenon where multiple factors play a role. An aging population is one factor, as older adults are more likely to have limited experience with digital technology and may prefer the personal service and support that a human advisor can provide. In addition, the increasing complexity of products and services, especially in areas like health, nutrition, retirement planning, and investment management, makes it difficult to choose correctly without the guidance of an advisor.
Beyond the needs of older customers, the digital revolution has also created new challenges that require human assistance. The increase in cybercrime and the advanced methods of fraud have made it more important than ever for businesses to have a strong network of trained professionals to help customers identify and protect themselves against fraud attempts.
There are several things service leaders can do to bring ‘the human’ back to digital services.
Firstly, one can recognize the value of human contact. Although technology and digitalization have revolutionized the service economy, human interaction is essential for providing personal service when things go wrong, for complex financial or health-related issues, and for fraud prevention.
Secondly, one can design a hybrid business model that seamlessly integrates human and digital channels. Customers should have the option to choose the channel that best suits their needs, whether it’s e-commerce, mobile banking, or face-to-face interactions with knowledgeable frontline employees.
Thirdly, one can invest in the training and development of employees. As the digital landscape continues to evolve, businesses need to invest in workforce training to stay up to date on the latest technologies including service robots and GenAI, as well as develop skills in customer service, fraud prevention, and digital competence.
Fourthly, leaders can promote a culture of empathy and understanding. Businesses should prioritize providing customers with a positive and supportive experience, regardless of their age or technological proficiency. Customers report that when they need to talk to a representative, they call sales and not customer service where technology dominates.
The significance of human contact is not a sign of a reversal of technological progress, but rather a recognition of the enduring value of human interaction in a complex and ever-changing digital world. Human contact also strengthens customers’ emotional connection to businesses and thus the economy, which can be a bonus.
Tor W. Andreassen
Professor of Innovation at NHH Norwegian School of Economics
Director for the research center Digital Innovation for sustainable Growth
Image credit: Jack Nackos.
