“With Amelia, we graduate into automating the knowledge worker, the customer service agent.”
The last ten years have been a rough time for many bank employees in Spain. The country’s lenders have laid off 89,500 workers on the back of narrowing margins, industry consolidation, mass closures of branches and gathering digitization. In 2008, when the financial crisis struck, Spain was home to some 278,000 banking professionals; today there are just 195,000. Another 3,000 redundancies are expected in the coming months, as Santander and Bankia plan to further streamline their businesses, pushing the total number of layoffs close to 95,000.
The job losses are unlikely to end there. In fact, they could accelerate, especially if a potential new threat to traditional branch and front-office jobs materializes: artificial intelligence (AI). As Finextra reports, BBVA, Spain’s second largest banking group, is on the verge of enlisting AI “agent” Amelia, developed by New York-based IPsoft, for many of its customer support functions:
BBVA has become the latest bank to employ Amelia, calling in the virtual assistant’s creator IPsoft to help develop AI-powered digital customer support services. The technology has already been trialled at BBVA’s call centre in Mexico to address customer complaints and enquiries. Now it will be extended to other markets and areas, as the bank seeks to digitise sales, advisory and support services.
Amelia is capable of detecting and adapting to caller’s emotions, as well as making decisions in real time, and can even suggest improvements to the processes for which ‘she’ has been trained.
Javier Díaz, CEO, IPsoft for Spain and Latin America, says: “Amelia is the result of 20 years of research during which we have tried to emulate the way the human brain works.”
It appears to be working. Amelia’s marquee clients already include around 20 Fortune 100 firms. The company is also in the process of developing pre-trained, limited-function mini-Amelias for small and medium-size businesses.
Amelia has a big advantage over less developed AI products on the market, according to IPsoft’s CEO, Chetan Dube: “her” ability to simulate the neocortex, the part of the brain that makes humans unique. This enables her to emulate a human being in order to forge “an empathetic connection, an affective connection, an emotional connection” with the customer. This, says Dube, is what’s ultimately needed to be a versatile customer service agent, whether the agent is human or Amelia:
“A secretarial assistant who can book you a car, find a good restaurant close by, make sure that your calendar is checked, tell you how the weather is outside, represents less than one and a half percent of the payroll cost of any enterprise. And [Microsoft‘s] Cortana, [Apple‘s] Siri, [Amazon’s] Alexa, etc. handle this quite well. But with Amelia, we graduate into automating the knowledge worker, the customer service agent.”
Given that knowledge workers and customer care reps are estimated to account for roughly a third of payroll costs, the temptation for companies of all shapes and sizes to replace them with AI agents like Amelia is likely to be huge. Dube claims that Amelia could provide as much as a 45% improvement to a company’s bottom line.
It sounds outlandish, but according to IBM the benefits could be even greater. Big Blue believes that call computerization solutions, which combine machine learning and advanced speech recognition — a service it no doubt hopes to provide to its corporate clients — have the potential to deliver a 60% to 80% cost saving over outsourced call centers.
The financial benefits are not limited to savings on salaries, personal benefits and social security. There are also savings to be made on human recruitment and training programs, which can cost thousands of dollars per worker. That’s not to mention the efficiency gains from being able to scale up at the drop of a hat or offer round-the-clock service to all customers, regardless of what time zone they’re in.
The benefits of using AI in customer care will not just be financial. Accordingto Wired magazine, using AI-powered bots, in conjunction with human agents, for textual interactions with customers will provide a much better experience than a standalone human-to-human exchange:
“Human-to-human chat exchanges are limited to text inputs. Moreover, they are often open-ended conversations, creating a less guided experience for the user. Bots, on the other hand, can respond immediately, and combine prompt buttons and other visual cues along with supporting textual conversations to offer a much richer, guided user interaction.”
More importantly, AI can scale and apply its knowledge much faster and more consistently than a human as its algorithms improve and it learns. Human agents, on the other hand, need to be trained, respond inconsistently and need to be motivated to care about the customer.”
If such claims are true, and AI bots do provide a vastly cheaper, vastly better all-round customer care service than human workers, the degree of disruption to job markets, both in advanced knowledge economies and key outsourcing markets such as India and the Philippines, could be huge. According to IBM, by 2020, 85% of all customer interactions will be handled without a human agent. And that will mean far less need for human workers.
In a recent interview with Forbes Dube concedes that society will need to find innovative ways of accommodating future workers in a rapidly changing jobs market (emphasis added):
“While much better and more interesting jobs — jobs stripped of their rote aspects — will be created, and while the current reality is that we have a labor shortage, ultimately we need to figure out what to do.”
Dube is right: we will need to figure out what to do. And fast. But his claim that the current reality is one marked by “labor shortage” is debatable, even in his home country of the United States. It certainly does not describe the reality of a country like Spain, which even after 18 consecutive quarters of moderate economic “growth” still has an official unemployment rate of 16.7%.
If other banks and companies follow BBVA’s lead, and begin replacing customer service agents and knowledge workers with AI bots at anywhere near the rate and extent that IBM gleefully expects, that figure could be set to rise a lot higher. By Don Quijones.