With the drive towards automation and self-service, human interaction is becoming less common in businesses of all kinds – and it’s a change that’s not being embraced by everyone
Despite all the talk about the robot revolution and job losses to automation and artificial intelligence (AI), very little has been written about the knock-on effect of such technological change on human-to-human interaction, which is in steep decline.
It’s clear to see, as banks, retailers and supermarkets move to self-service models, reducing the number of staff who can interact face-to-face with customers at bricks-and-mortar sites.
Other sectors affected include travel (people increasingly book holidays online rather than visit the dwindling number of travel agents), utilities (DIY meter reading and online accounts), and telecoms (note the push for customers to handle their own accounts online).
On an even more basic level, we appear to be gradually losing the opportunity to speak to a human when we wish to communicate with a company – we’re either directed to online chat, automated phone systems with synthesised voices or, in extremis, contact is reduced to tweeting.
What’s more, this trend looks set to accelerate. The UK Contact Centres 2018-2022: The State of the Industry report by ContactBabel, which provides research on customer service centres, predicts that 45,700 jobs will disappear from the retail sector between now and 2021. Of those, 20,000 are projected to go from the 168,000 who are employed by high-street retailers and distribution firms to handle customer relations, as shoppers increasingly buy and interact online.
Its prediction for the finance sector – the biggest customer service centre employer in the UK, with almost 230,000 staff – is that nearly 13,000 jobs will go as banks and insurers restructure. Similarly, the number of jobs at utility companies will dwindle as nimble newcomers with cheaper tariffs and apps force change.
Winners and losers
So just what are the benefits to businesses and customers of this transformation? While it’s clearly more cost-effective for businesses to employ fewer staff, this isn’t the only driver.
In part, some customers prefer it because it can be faster and more convenient to go online or use an app. For example, financial ‘robo-advice’ (digital financial advice based on an algorithm) is growing apace, with £6.6bn in assets under management (AUM) in 2018 – and this is an industry that’s expected to show an annual growth rate over the next five years of 51.4 per cent, resulting in around £35bn AUM in 2022.
As Lee Morris, Investment Director at Quilter Cheviot, explains: “Ease of use and access makes robo-advisers a popular option for many. Looking deeper into the reasons for this, the lack of human interaction makes it an ideal scenario for the iPhone generation, who are able to interact on an anonymous basis with an app, even regarding fairly personal subjects – something many people have become accustomed to over the past 15 years.”
Indeed, Morris points out that, as a result of this process, customers can now manage relatively low-cost portfolios from their iPhones as easily as ordering a takeaway.
Still, this begs the obvious question as to whether these customers risk something worse than financial indigestion should they make investment decisions based on a lack of knowledge.
Morris points out that the Financial Conduct Authority is pressing such firms “to provide more clarity on fees and gather more information on customers’ financial circumstances”.
Andrew McLaughlin, Chief Executive at RBS International, is keen to stress the benefits of increasing automation in improving customer satisfaction levels.
However, he admits that incumbent bank players are being driven both by customer demand and the need to react to competition from new entrants who don’t have a physical presence. “Automation and, more importantly, digitalisation will mean fewer properties and people are needed to deliver banking services,” he says.
“But this is a gradual transition. I understand why people are concerned, but I think that in the end it will be good for small islands such as Jersey. This shift will free up more people in the workforce to support other sectors – and it’s been discussed at length during the recent election campaigns that Jersey wants to diversify.”
For those aged below 25, the lack of human-to-human interaction may perhaps be unproblematic and largely unnoticeable – this is, after all, the generation that prefers to text or WhatsApp rather than make a phone call. But for other, generally older, less tech-savvy customers, who are used to more face-to-face contact, the transition is often less welcome.
McLaughlin, however, argues that this is an assumption not totally borne out by his experience. “Since launching our Digital Lounge in our Bath Street branch earlier this year, we’ve] been running weekly sessions to help our customers understand more about our digital services,” he says. “And we’re seeing customers accessing this information from across all demographics.”
Personal touch
Fortunately, complex transactions still require human-to-human interaction, as Lee Morris explains. “If you were planning a special holiday such as a safari, you probably wouldn’t use a budget airline and an online agent to make arrangements in some far-flung exotic location where there are lots of difficult logistics and precise, complicated requirements.
“Similarly, with a portfolio for more complicated arrangements, clients would prefer an experienced organisation that’s accustomed to working in a variety of market conditions. In such scenarios, there isn’t any substitute for speaking to an expert.”
Paul Douglas, Managing Director at Accuro, which provides fiduciary and family office services to the private client market, is adamant that human-to-human interaction is key to his business.
“Human beings are complex by their very nature, and this is heightened by global wealth, geopolitical issues, religious beliefs, regulation and increasing taxes and transparency,” he explains.
“In our experience, no two clients are the same. While financial services are moving towards automation, people still want a personal approach to their relationship with an institution, so that their views are heard and respected.
“As far as I’m aware, no system or automation can understand and respond to the nuances that may be communicated through subtleties of verbal or body language. For example, the dynamic of a client who may have recently lost a loved one, been through the process of divorce or a family dispute, or who has views on one’s future son or daughter-in-law, can’t be reduced to an algorithm.
“Each of these examples is relevant to the industry within which we operate and must be navigated to bring a successful outcome to the client.”
Being human
It must also be appreciated that in geographically small communities, human-to-human contact is vital for some businesses.
The societal importance of supermarkets to a community is stressed by Colin Macleod, Chief Executive of The Channel Islands Co-Operative Society, which is owned by more than 100,000 Channel Islanders. “What’s generally not seen is that our neighbourhood stores can be the glue that holds communities together,” he explains.
“We’re acutely aware that we can sometimes be the only people that members of the community see in a day – so, rather than seeing technology as a way to reduce human interaction, we see it as a way to improve service.”
He argues that technology is helping his organisation to engage more deeply with customers. This takes a variety of forms – from improving its ability to forecast stock demand and thereby ensure better product availability, to processing customer payments in more convenient ways, as well as “ensuring we hear the community’s voice in a way that would be impossible via traditional forms of communication”.
Of course, the risk is that if the vast majority decide to have their groceries delivered by Ocado, supermarkets will become as rare a sight as a whistling milkman doing his rounds.
All of this leads us to ask if we should be concerned about the decline in human-to-human interaction. Isn’t digitalisation part of an inevitable journey to a better future? The answer isn’t simple.
While there are clearly benefits, there are also disadvantages for some. It’s perhaps too simplistic to say that the old, vulnerable and poor will all be adversely affected by an accelerating shift to digital and a reduction in human interaction – yet a significant minority of the population aren’t equipped with native digital skills and the latest smart phones. The danger remains that, without help and support, some people will be further marginalised in the rush to reduce human-to-human interaction.
Where will such ‘progress’ end? According to a wide range of tech experts, within 10 years many urban taxis will be driverless, while in time robots will replace domestic cleaners, home carers, shop staff and call-centre employees. These robots will be able to interpret human emotions and deliver empathetic, realistic responses.
Ray Kurzweil, Google’s Director of Engineering and a noted futurologist, has even predicted that by 2030 there will be a melding of humans and robots, as we hook up our brains to computers to enhance our abilities. At that point, human-computer to human-computer interaction may then become the norm.
If you weren’t feeling a little worried before…