Humans and Machines - Building a Better Bank

Jeremy Balkin, Head of Innovation, HSBC USA

Jeremy Balkin, Head of Innovation, HSBC USA

When HSBC Bank launched Pepper, the world’s leading humanoid robot by SoftBank Robotics, at its U.S. flagship branch in New York City this summer, HSBC set a new precedent for the financial services industry–banking no longer has to be boring. It can actually be fun.

Pepper’s new role at 452 Fifth Ave marked two major world firsts for HSBC–We were the first bank to deploy a humanoid robot to customers in the U.S, and we were the first deployment of Pepper in a permanent retail setting in New York City across any industry. In addition to breaking barriers in the financial services industry, we knew that, most importantly, Pepper had the potential and ability to transform our business and the way our customers and employees view HSBC. To appropriately measure this expected impact, we established six key KPIs, or objectives, that we hold ourselves and Pepper accountable to as we continue on this exciting journey.

Though it is just the beginning, less than two months later, the impact Pepper has had on the business is eminent when measured against the six objectives we set when HSBC became the world’s first bank to deploy the world’s leading humanoid robot.

1. Drive Foot Traffic Off of Fifth Avenue into our Flagship HSBC Branch

Prior to launching Pepper at 452 Fifth Ave, we conducted a three-month study to capture and understand a day in the life at the branch. We tracked every visitor that walked off Fifth Ave, measuring whether they were customers or non-customers, what they asked for, and when they visited. The data and branch-led feedback helped us not only shape the design of the first iteration of Pepper at HSBC, but has allowed us to measure the significant impact Pepper has had on activity at our flagship branch.

"We knew that, most importantly, Pepper had the potential and ability to transform our business and the way our customers and employees view HSBC."

In the days following the launch our flagship branch experienced a 10x daily foot traffic and an outburst of excitement and buzz like never before. The results show that Pepper’s appeal has stuck, as the robot conducted roughly 5,550 interactions with customers, prospective customers, employees and visitors in its first month, with a week-over-week increase of ~18 percent. The overwhelmingly positive attention in the media has helped increase foot traffic and spark visits to our flagship branch as well.

2. More Needs Fulfilled and be More Relevant to More Customers

With increased foot traffic in our flagship branch, we hoped and assumed this would mean more opportunities for our staff to fulfill more needs for more customers. This proved to be accurate as well. Within three hours of launching Pepper, we believe we hit break even on our investment in Pepper, as the influx of people in the branch led to new relationships with highly valued clients, in addition to mortgage, wealth and business banking referrals. We expect these numbers to continue an upward trend as we look to roll out additional capabilities for customers to be able to apply for a credit card or checking account on Pepper, for example.

3. Reduce Customer Waiting Times and Improve the Waiting Experience

With Pepper in the mix, banking no longer has to be the boring, mundane chore it was once thought to be. If/when customers do have to wait in line to speak to one of our bankers, they can now engage with Pepper to productively pass the time, whether that’s by asking Pepper the weather forecast, to tell a clever joke, or how to do things like transfer funds or deposit a check at the ATM or on our mobile app (potentially solving their reason for coming into the branch in the first place). According to JD Power, the industry benchmark for waiting time in a bank branch is under 4 minutes. The average session time on Pepper, however, is 55 seconds, proving that customers can potentially solve their banking needs with Pepper in 4x the amount of time they could spend waiting to just speak to a teller or banker. Additionally, the average amount of time Pepper takes to answer a question is 1.3 seconds, proving how quickly customers can get the answer their looking for if they choose to interact with the 4-foot-tall robot.

4. Educate Customers about Self-Service Options and Other HSBC Products and Services

We wanted customers to be able to use Pepper as a tool to educate themselves about HSBC’s products and services, as well as self-service options at the ATM, on the mobile app or via online banking. Sure enough, customers (and prospective customers) have keenly done so. In the first month, Pepper received roughly 450 questions about HSBC’s products alone. The most common products people inquired about were credit cards (our exclusive World Elite Mastercard in particular) and checking accounts. The most common transaction customers asked about to learn their self-service options was check deposit. In the first week, 9 percent of Pepper’s responses informed customers they could save time by using the ATM and we saw a 6.8 percent increase in ATM volumes assumingly as a result of the self-service nudge.

5. Give Bankers More Time to Serve More Customers and Fulfill their Needs

A common question people have asked is, “Is Pepper going to take our jobs?” The answer to that question is a confident NO. Instead, Pepper allows our branch staff to spend more time each day doing what they do best, responding to more complex customer needs, and less time answering simple questions or addressing basic needs that Pepper can now solve. From our three-month study prior to Pepper’s launch, we found that 73 percent of customers asked our bankers generic, binary questions that Pepper can now answer. Such questions include things like, “I need to deposit a check,” or “Where is the ATM?” or “Can I get foreign currency?” or “Where is the nearest subway?” Now that Pepper can answer these types of questions and show customers how to deposit a check at the ATM or on the mobile app, for example, our staff can spend more of their valuable time deepening existing relationships and cultivating new ones, which we’ve seen reflected in the increase of checking and savings accounts, investments and credit cards opened at our flagship branch.

So, rather than taking our jobs, Pepper gives HSBC employees more time back to do their jobs more effectively and efficiently. Plus, Pepper has sparked conversations around the need to actually hire more branch staff at 452 Fifth Ave to respond to the influx of customers and foot traffic spurred by the friendly robot’s presence.

6. Boost Employee Engagement and Morale The smiles on our employees, customers and visitors’ faces when interacting with Pepper say it all when it comes to this objective. Historically, over the past ten years in particular, a bank branch was not a place that most people thought about in a positive light, let alone smiled when they walked into one. Since Pepper’s launch at 452 Fifth Ave, however, the amount of genuine smiles we’ve seen as people ask Pepper questions and listen to its clever responses, from our youngest to our oldest customers and employees, has been the most rewarding part of this whole journey.

If our employees are happy, our customers are more likely to be happy– and at the end of the day, that’s what Pepper, and financial services, is all about.

And remember, if you’re in town, come by and MeetPepper.  

Weekly Brief

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