Category: CX / Customer Experience

Exploring South Africa’s CX Services Potential: Your Gateway to Exceptional Customer Experiences

South Africa has emerged as a stand-out destination for customer experience (CX) services. Offering a talented workforce, cost-effectiveness, and infrastructure, the nation is attracting the attention of both providers and customers alike. Now is the time to capitalize on this alluring market in this rising continent. Discover seven advantages of South Africa and compare its hotspot cities in this blog.

With the rapid global transformation and dynamic shifts in commerce shaped by cutting-edge strategies, one continent is emerging as a rising giant in the realm of customer CX services delivery – Africa.

According to Everest Group’s recent report Africa on the Rise – The Next Frontier in Customer Experience Management, the continent’s customer experience management (CXM) delivery presence has surged. Boasting a full-time equivalent (FTE) workforce strength of 200,000-250,000 offering CX services to clients in and out of the continent, Africa has captured interest from global enterprises in the United Kingdom, the United States, and Western Europe.

Get insights on the CXM industry in Europe in our webinar, Navigating the European CXM Outsourcing Market: Trends and Insights.

As enterprises look to mitigate concentration risks by diversifying their contact center presence and further tap advantages such as cost arbitrage, diverse talent, and rapid technological advancements, businesses find Africa increasingly attractive for CX delivery. At the same time, the country’s focus on integrating environmental, social, and governance (ESG), and diversity, equity, inclusion, and belonging (DEIB) elements further enhance its appeal to companies today.

Amidst Africa’s overall growth,South Africa in particular has captured the interest of CX providers and enterprises as a paragon for lucrative CX delivery. As the stage is set for South Africa’s continued ascent, let’s unravel the reasons behind South Africa’s emergence.

The emergence of South Africa

South Africa is developing as a globally attractive location for CX service delivery, drawing attention for numerous compelling factors that include:

  1. Cost-effectiveness: South Africa presents a promising advantage in cost-effectiveness for contact center services, offering competitive pricing in comparison to traditional nearshore destinations in Eastern Europe, and Latin America. The country enjoys relatively lower labor costs while ensuring high-quality service standards, making it an enticing proposition for companies seeking to optimize customer support operations without compromising on service excellence
  2. Skilled and multilingual workforce: With a large pool of young and educated talent, South Africa’s workforce possesses good aptitude and has a solid working knowledge of technology. With a variety of languages spoken, including English, French, Spanish, and native African languages, South Africa offers a significant advantage for businesses with global customer bases by fulfilling diverse language requirements
  1. Time zone compatibility: The country falls within a favorable time overlap with major markets like Europe and the United States, enabling seamless communication and smoother real-time collaboration between businesses in South Africa and their counterparts in these key markets
  2. Infrastructure: South Africa boasts well-equipped built and digital infrastructure, facilitating seamless interactions for traditional and hybrid contact centers. With robust telecommunications and widespread internet connectivity, businesses can efficiently run contact center operations
  3. Impact sourcing focus: South Africa offers companies a chance to meet impact sourcing goals while remaining cost-effective. With a skilled and diverse population, as well as a young workforce, the country provides an opportunity for impactful sourcing that supports local economic development
  4. Regulatory support: The South African government actively supports outsourcing by offering incentives to companies, stimulating development through foreign investment and job creation. Governing bodies like the Department of Trade, Industry, and Competition (DTIC), Business Process Enabling South Africa (BPESA), and CapeBPO provide resources and reward job creation
  5. Cultural Affinity: South Africans’ familiarity with US and UK culture and shared holiday celebrations create cultural similarity with global markets for CX delivery. This affinity facilitates efficient CX service delivery by enabling a better understanding of customer preferences, language, and lifestyle, fostering smoother interactions and stronger connections

CX providers in South Africa

While numerous global service providers thrive in the CX services landscape in South Africa, regionally-based service providers also have built a noteworthy industry reputation, leveraging different locations to extend their services both within and beyond the African continent. These service providers offer complete customer lifecycle management, business applications, marketing, and lead generation, with customer engagement specialists and Artificial Intelligence (AI)-driven solutions for enhanced customer engagement.

Examining the major hot spots for CX services delivery within South Africa

In South Africa’s remarkable rise in the CX outsourcing industry, three dynamic cities – Cape Town, Johannesburg, and Durban – stand out as hotspots for CX services delivery.

Below, we explore some of the elements that place these cities at the heart of the driving force behind South Africa’s growth and prominence in this industry:

City  Attributes of the city

Cape Town

Cape Town’s compelling 60-70% cost advantage over major UK tier-2 cities and its favorable business environment with a reliable infrastructure, advanced technology, and a skilled workforce make it an attractive choice for cost-conscious companies. English is the primary language utilized for BPO services in Cape Town, although there is also a significant Afrikaans-speaking population. Cape Town showcases a remarkable collaborative spirit between the local government and operators, driving strategic projects that lay the groundwork for future growth and success in the region’s CX services delivery landscape. With a focus on key verticals like retail, telecom, utilities, and travel and hospitality, the city hosts specialized skills academies to support these industries, ensuring a skilled and talented workforce that contributes to its competitive advantage.


Durban stands out as a cost-effective contact center destination, offering up to 70% lower operational costs than tier-2 cities in high-cost countries. Its skilled and diverse workforce, supported by reputable universities, makes it an appealing choice for outsourcing, accounting for 13% of South Africa’s contact center jobs. English is the primary language for BPO services in Durban, with significant a Zulu-speaking population. Recent infrastructure development, reliable telecommunications, modern office spaces, and high English proficiency further enhance Durban’s appeal for seamless CX services delivery.




As South Africa’s largest city, Johannesburg presents a substantial English-speaking talent pool, making it an advantageous hub for contact center outsourcing with its diverse and skilled workforce. In addition to the Afrikaans-speaking population, talent proficient in Spanish, Portuguese, German, Dutch, and French languages are readily available. Accounting for 40% of the country’s contact center jobs, as per BPESA, Johannesburg ensures abundant resources for efficient outsourcing operations. The city’s modern infrastructure, including reliable telecommunications and robust IT systems, guarantees seamless contact center operations.

The road ahead for South Africa

As South Africa establishes itself as a sought-after location for CX services delivery, the country is poised to attract more global enterprises expanding their service delivery footprint. With its skilled workforce, cost-effectiveness, and cultural affinity, this vibrant nation offers fertile ground for driving business success and forging lasting partnerships. To stay ahead in this dynamic environment, organizations need to quickly seize the moment and explore the untapped potential of South Africa’s burgeoning CX services delivery sector.

Read Everest Group’s report Africa on the Rise – The Next Frontier in Customer Experience Management to learn more about the African CXM landscape. If you have questions or would like to discuss South Africa’s evolution, please reach out to Chhandak Biswas, [email protected], or Joshua Victor, [email protected].

Teleperformance Proposes to Acquire Majorel: Global Titans Continue Their Unstoppable Run in the Customer Experience Management Industry | Blog

Teleperformance, a global leader in the Customer Experience Management (CXM) industry, has announced its proposal to acquire Majorel, another large rival in the industry. This move is set to reinforce Teleperformance’s position as a dominant force in the market and expand its reach even further. With both companies known for their excellence in CXM services, this acquisition has the potential to deliver an even greater level of innovation to clients worldwide. Read on for more details on the impact of this deal on the CXM industry.

While there is increasing appreciation for the strategic impact to businesses of delivering great customer experiences, a large part of the market is still managing Customer Experience (CX) as it has always done, which is to drive down costs and focus on operational efficiencies. Consequently, Customer Experience Management (CXM) provider margins tend to be lower than in other Business Process Services (BPS) segments, and it is not surprising that in the current uncertain economic environment, providers are focusing on tried and tested strategies such as consolidation to deliver on growth objectives.

Teleperformance further augments its leadership position by scale

The latest in the wave of mergers and acquisitions (M&A) in the CXM industry is the largest CXM services provider, Teleperformance, announcing its intention to acquire Majorel, another sizable competitor, for a total consideration of €3bn. Subject to regulatory approvals, the combined entity will result in revenues of more than €10.2bn and EBITDA of more than €2.2bn if it closes as expected between Q4 2023 and Q1 2024, resulting in Teleperformance achieving its 2025 revenue goal of €10bn two years in advance. The merged entity will be the largest CXM provider both in terms of revenues and FTEs, with nearly half a million employees worldwide.

With Concentrix’s recent announcement to acquire Webhelp, these two CXM behemoths will be more than twice the size of their next largest competitor, Foundever, which itself resulted from a merger of two significant entities (SYKES and Sitel Group). Given their global reach and ability to cater to almost all regions and languages, they will naturally be in consideration by any global buyer of these services that is looking to consolidate its provider portfolio and work with fewer but more strategic partners.

What this means for the CXM and BPS industry

As we have mentioned in our recent blog, we are seeing the rise of global Titans in the CXM industry. While this might mean less choice in service providers or strategic transformation partners for global buyers, it will also lead to cost synergies, operational efficiencies, and enhanced digital capabilities. Adding more scale allows these providers to make more concerted investments in a space which is already seeing the entry of Big Tech and hyperscalers such as Microsoft and Google into CX technology. A greater focus on innovation by these Titans will result in better products, solutions, and services in the industry.

The global outsourced CX market is a highly fragmented one, with the 10 largest providers holding a total of ~30% share of the $100 billion+ market and hundreds if not thousands of other providers making up the remaining 70%. In addition, our estimates put penetration of this market between 30-35%, indicating significant room for growth in the future. Therefore, smaller providers can continue to thrive if they are successfully able to articulate and deliver upon differentiated value propositions such as offering superior products and services, aligning more attentively to their clients’ needs, or specializing in niche areas, whether that is in a particular industry, region, buyer size, or service line.

Within the broader BPS environment, the combined entity of Teleperformance and Majorel will have a stronger Trust and Safety (T&S) portfolio and will become one of the top three T&S providers (with Accenture and TELUS International) in terms of revenues. This, along with deep digital CX expertise, Teleperformance’s recruitment process outsourcing and finance & accounting services, and Majorel’s vertical BPO solutions in banking, insurance, and retail industries, make the new entity a force to be reckoned with in the BPS world, becoming one of the top three providers by revenues in BPS. However, it will continue to remain a CXM specialist primarily as more than 80% of its revenues will be CXM-oriented, at least for now. It will be interesting to see if the combined entity will accelerate the growth of its non-CXM revenues to become known as a broader-based BPS provider in the future.

What to expect going forward

Recent economic headwinds have provided an excellent opportunity for M&A in this market as valuations are once again becoming attractive for a lot of providers. With an enormous push towards digital CX capabilities, service providers are looking aggressively to plug capability gaps, and firms that can help them achieve these objectives are becoming hot acquisition targets. We expect further M&A activity in the next 12-18 months, both big (scale-focused) and small (capability-focused).

However, it will be a mistake for providers to allow M&A and, subsequently, integration activity to distract them from focusing on how generative AI such as ChatGPT can be applied in the contact center environment. This disruptive technology is already showing great promise and has the potential to level the playing field between big and small providers if leveraged responsibly. Despite believing strongly that there will always be a need for human interaction and involvement within CXM, the contact center of today should be quite different from the contact center of the near future, as early as two years from now.

To discuss global customer experience management topics, contact Shirley Hung [email protected], Sharang Sharma [email protected], or Aishwarya Barjatya [email protected].

You can access our CXM research coverage and also attend our LinkedIn Live session, Delivering CXM Services From Africa: Who, Where, Why, And How to learn why Africa has become an ideal option for global customer experience management.

Concentrix Acquires Webhelp: A Game Changer in the Global Customer Experience Management (CXM) Landscape | Blog

The combination of Concentrix and Webhelp will create a global customer experience management (CXM) titan that can significantly shape the industry’s future. Let’s explore the benefits and other implications of this mega deal.

The recent announcement of Concentrix’s planned acquisition of Webhelp in a US$4.8 billion deal is a major milestone in the growing trend of mergers and acquisitions in the CXM industry over recent years.

With an estimated pro forma 2023 annual revenue of US$9.8 billion across multiple businesses, including CXM, trust and safety, and legal services, the combined entity will emerge as a global service powerhouse with the potential to significantly shape the CXM industry.

Key drivers of the acquisition

The strategic benefits of this acquisition include:

  • Stronger operational presence beyond North America: Webhelp has a strong presence in sales, marketing, and payment services across Europe, Latin America, and Africa. With this acquisition, Concentrix will be able to strengthen its operations beyond North America in these geographies. Concentrix is further set to bolster its extensive operations in the Asia-Pacific region by leveraging Webhelp’s existing operational presence and partnerships with regional CXM providers in China and Japan through joint ventures with Kingwisoft and Telenet, respectively. This will result in the combined entity having a diversified revenue contribution across the Americas, Europe, and Asia Pacific
  • Enhanced delivery capabilities in Europe, Latin America, and Africa: Webhelp adds more than 25 new countries to Concentrix delivery locations, including Denmark, Greece, Estonia, Finland, Norway, Madagascar, Peru, and South Africa, thus, strengthening Concentrix’s delivery presence in Europe and Latin America, as well as helping it establish an African footprint. This collaboration will establish a robust and well-balanced global footprint, which can attract global enterprises looking to partner with service providers who can offer the right shoring mix to their end customers across geographies
  • Varied customers: Webhelp’s customer base is primarily situated outside of North America leading to limited client overlap with Concentrix. With this acquisition, Concentrix is set to gain around 1,000 new clients from Webhelp, consisting of over 25 Fortune Global 500 clients, and more than 200 clients from emerging economies. This will significantly increase the combined entity’s client base to approximately 2,000 clients, of which 155 are Fortune Global 500 clients and 320 are from the new economy sector. By expanding and diversifying its client base, Concentrix can increase revenues, broaden service offerings, and gain economies of scale, while its clients also will benefit from access to a wider range of resources and expertise
  • Operational synergies: Combining Concentrix and Webhelp will enable the sharing and cross-selling of digital capabilities, including Concentrix’s Catalyst platform and ServiceSource’s expertise in the fast growth-technology (FGT) segment, as well as Webhelp’s Lead Factory and consulting firm Gobeyond Partners. This will allow the combined entity to offer clients high-value services, addressing their needs more comprehensively and efficiently. Moreover, the partnership is expected to broaden the global reach of Concentrix Catalyst and accelerate its expansion by leveraging Webhelp’s engineering know-how in Europe and Latin America. Sharing resources also can lead to operational efficiencies, enabling the merged entity to enhance profitability and market competitiveness. Expected cost synergy benefits will be US$75 million in the first year after the closing of the transaction and will reach a minimum of US$120 million (after accounting for investments) by the third year
  • Expansion of other service lines: Concentrix can expand its trust and safety service lines by utilizing Webhelp’s delivery footprint and in-house solutions, such as Contentus.AI for more efficient moderation, Navigatus for enhancing work quality, and Moderatus for detecting and removing false news and hate speech. In addition, Concentrix can leverage Webhelp’s expertise in legal services, including legal claims management and Know Your Customer (KYC) services, to further expand its Business Process Services (BPS) portfolio

Key considerations

  • Integration challenges: Varying technology systems and processes, as well as the difficulty of integrating and managing data, can potentially hinder the Webhelp and Concentrix union. Bringing the respective customer service models and training programs into alignment also can pose challenges. Furthermore, integrating human resources and payroll systems, benefits, and compensation programs can be complex and will require careful planning and execution. However, contrary to other recent CXM acquisitions, we do not foresee a significant culture clash challenge between Concentrix and Webhelp
  • The emergence of a new category of global CXM Titans: In recent years, the CXM market has witnessed a significant trend towards consolidation, with several high-profile mergers such as Sitel Group’s merger with SYKES to form what is now known as Foundever and Comdata Group’s merger with Grupo Konecta. The upcoming collaboration between Concentrix and Webhelp is poised to contribute to this consolidation trend, with the combined entity expected to control a considerable market share of roughly 6-8%. Similar to the super-major formation era of the late 1990s and early 2000s in the oil and gas industry, Concentrix, Foundever, and Teleperformance are poised to form a new category of global CXM Titans that have the potential to dominate the market due to their extensive resources, expertise, and global reach. Their emergence validates the growing appetite for comprehensive CXM solutions and the need for providers who can meet these demands on a large scale
  • Competition and opportunities for other providers and specialized players: The consolidation of these two forces may create challenges for other CXM players who might struggle to compete with the resources and scale of the merged entity. However, this also could create opportunities for providers to thrive with tailored offerings targeted at specific customer service areas or industry sectors, such as IGT Solutions and ResultsCX with their focused offerings for travel and healthcare, respectively

The announcement of Concentrix’s acquisition of Webhelp has generated a significant buzz in the CXM industry. Certainly, we expect this pending acquisition to fuel more CXM market consolidation, which may potentially limit buyers’ choices for transformation-oriented strategic partnerships.

Despite these concerns, the Concentrix and Webhelp combination creates a formidable CXM force that will likely shape the industry’s trajectory for years to come. Monitoring the impact of this collaboration on the CXM landscape as well as watching other market players respond to the ongoing consolidation trend will be fascinating. Who will be the next global CXM titan to join their ranks?

To discuss global customer experience management topics, contact Shirley Hung [email protected], Sharang Sharma [email protected], or Divya Baweja, [email protected].

And watch our LinkedIn Live event, Delivering CXM Services from Africa: Who, Where, Why, and How, to learn why Africa has become an ideal option for global customer experience management.

Reinventing the P&C Insurance Claims Value-Chain: Moving to the Claims of the Future Vision | Blog

Heightened momentum for technology-first and automated operations is elevating customers’ need for greater convenience, instant gratification, faster turnaround time, and more self-service options. Today’s digitally-immersed consumers have grown accustomed to doing business anywhere, at any time, and with any device, and this is shaping up the new normal of the insurance industry; transforming the insurance claims journey becomes a pivotal priority for Property and Casualty (P&C) carriers to meet demands for a customer-centric hyper-personalized experience driven by digital technologies. Read on to learn more about the zero-touch claims of the future vision and how to achieve it.

Leading InsurTechs with pure-play digital models are heating up the competitive landscape, making it imperative for traditional insurers to optimize their claims functions. An insurer can achieve future goals by accelerating the adoption of next-generation capabilities.

Amid the digital shake-up and rising demand for delivering an “Amazon-like” experience, insurance operations are plagued with workflow complexities caused by multiple intermediaries and legacy systems. Digital and emerging technology solutions can help insurers reshape the customer claims journey and improve turnaround time while reducing information leakages and fraud and delivering a superior customer experience.

Foundational pillars of a digital-claims future

To embark on a transformational claims journey, insurers need to go beyond traditional after-the-fact claims management, tap into the plethora of available data to unlock immense value, and focus on offering omnichannel experiences powered by intuitive digital technologies. P&C carriers will need to excel at the 3Es: experience, efficiency, and effectiveness.

Winning P&C digital claims offer a compelling digital experience and strengthen customer loyalty. Insurers can differentiate themselves by supporting each touchpoint in the claims journey – starting even before an incident occurs – with data, artificial intelligence (AI), analytics, and other emerging technologies—all while retaining the human touch.

By offering seamless omnichannel customer experiences across claims registration, disputes, timely process updates, final settlements, insurers can improve customer satisfaction and retention rates. This is crucial given that Everest Group’s research shows ~35% of P&C insurers’ priorities across claims management are focused on enhancing customer experience (based on an analysis of 60+ case studies involving claims modernization/transformation).

Insurers also need to drive superior efficiency by enabling data-driven and analytics-driven claims processing. This ensures focus on effective service delivery to reduce claims expenses, while improving claims handling accuracy and ensuring greater customer satisfaction.

Bridging the gap between current and future digital claims-processing

With innovation growing throughout the P&C insurance industry value chain, AI/Machine Learning (ML)-enabled tools eventually will help insurers redefine their roles from claim handlers to claims preventers. P&C carriers flourish when they embrace this mindset shift from a risk transfer to a risk mitigation model.

Insurers can unlock value in the claims industry by employing the internet of things (IoT) and telematics capabilities combined with the connected devices ecosystem and third-party data to identify red flags and alert customers of risks before any loss occurs.

Insurers need to look beyond mere cost-savings, accurately utilize the wealth of data they possess, and transform claims from a necessary back-office function into a source of competitive advantage and market differentiation. Below is a look at the key steps to reach a seamless claims settlement:

Exhibit 1:

Future Enables Carriers
Source: Everest Group

Rigid legacy systems for claims processing can present challenges for insurers and prohibit them from adapting to the evolving customer requirements and optimizing their operations. Legacy IT processes slow progress and innovation, eventually affecting the end-user experience that holds the potential to make or break insurers’ reputations. Taking a one-size-fits-all solution approach for different business lines, failing to adopt modular design principles, and having limited advanced systems skills add to the overall complexity and further weaken the ability of insurers to thrive in today’s competitive environment.

To attain a competitive edge, insurers require instant resolutions and digital experiences on the go. Leading insurers are harnessing the power of unified and custom low-code/no-code platforms with advanced AI and analytics tools to streamline claims processes, modernize systems, and build modern layers on top of existing legacy systems or other core platforms without involving time-intensive and expensive upgrades. This allows insurers to build reusable codes and design “plug and play” environments to deliver enterprise-grade solutions at speed and scale. Low code makes it easy for carriers to simultaneously focus on profitability, enhance customer experience, and fulfill the vision of balancing quick wins with strategic initiatives.

The need for digitalization of workflows and customer interfaces, convenient user journeys, reusability of components and faster configurations, cost optimization, and skill management are the top drivers fueling the demand for low-code/no-code technology for insurers in modernizing the claims process.

For instance, a leading global insurer used a low-code platform to create an intuitive and dynamic first notice of loss (FNOL) prototype application in just 90 minutes and transformed it into a fully functional mobile application for 2,000-plus users in four weeks, delighting customers.

Where do the opportunities lie?

A combination of agile insurance claims process/operating model transformation, adoption of advanced technologies and telematics, a skilled workforce with technical and domain expertise, and a connected partner ecosystem are the fundamental facilitators for the probable future of zero-touch claims.

In the future of claims processing, P&C insurers will be able to facilitate touchless claims decisions, accelerate payment settlements, assess indemnity obligations accurately, prevent fraud, and mitigate claims litigation losses.

Exhibit 2:

Industry Frontrunners
Source: Everest Group

Below are the key elements needed to move from the current state to claims of the future:

  • Acting quickly and flexibly: The rapidly changing environment is compelling insurers to keep up with the pace. Incumbents need to act fast, develop and launch new products, accelerate FNOL processing, and streamline claims management quickly to stay relevant. The need for agility is greater than ever. Adopting the latest technologies and processes will propel P&C carriers to move faster and separate leaders from laggards
  • Adopting advanced analytics and AI: Real-time sensor and IoT data coupled with AI and ML-backed algorithms will enable insurers to process claims efficiently and manage fraud without any human intervention. For instance, leading insurers are using an AI model embedded within the claims workflow to assign a complexity score to each claim based on multiple parameters and process all low-risk claims under a certain threshold. Low-complexity claims are routed for straight-through processing while high-complexity claims are sent to the right team depending on the claims adjuster’s specialization and availability, thus ensuring speed and accuracy
  • Transforming talent management strategy: Modernizing the claims journey requires relying on advanced technologies and a skilled workforce to manage emerging risks. Insurers need to enhance their long-term value proposition to attract skilled workers with technical and domain expertise
  • Partnering with digital claims solution providers: Building partnerships with solution providers can support carriers in extracting maximum value by utilizing the provider’s end-to-end digital claims solutions portfolio. Advanced capabilities across core functions include claims notification, adjudication, and settlement to fulfill P&C carriers’ needs across the claims value chain

To achieve the zero-touch claims of the future vision and keep up with leading competitors, insurers will need to invest in advanced technologies and drive value creation by taking a more proactive and customer-centric approach.

Successful insurers who can deliver a hyper-personalized experience will generate superior efficiency and leverage data and ecosystem insights to proactively detect fraud. Above all, this transformation improves the claims ratio by building predictive and preventive capabilities. Insurers who take these steps will emerge as industry frontrunners.

To discuss transforming digital claims, please reach out to [email protected], [email protected], and [email protected].

To learn more about technology-first, automated customer experiences, watch our webinar, Strategies for Customer Experience (CX) Success in an Uncertain World, for trends and recommendations on what to prioritize to deliver exceptional customer experience.

How Technology Can Help the Wealth Management Industry Navigate Coming Changes in 2023 | Blog

With the economy headed for slower growth, technology is more important than ever to enable companies to better serve customers by providing hyper-personalized experiences. Read on to learn how the disruptions will impact the wealth management industry and the role technology and service providers can play to help wealth managers navigate the choppy waters ahead.

In light of changing investor preferences, mounting regulatory pressures, and a looming economic slowdown, the wealth management industry is at the cusp of change. While the industry has demonstrated good resiliency and recovery post-pandemic, signs point to subdued growth in the next few years.

The wealth management industry has been experiencing one of the longest periods of market growth and economic stability in recent history. Financial support by governments, lower interest rates, and limited consumption opportunities have contributed to rising household wealth, generating increased revenues for wealth management companies from more fees and advisory support.

But the rapid rise in interest rates and fear of an economic slowdown will put pressure on this industry in 2023. Let’s look at the factors disrupting the wealth management industry in the first of our two-part series.

Fundamental change in ecosystem participants – passing trend or here to stay?

The industry is seeing structural changes in ecosystem participants. Traditional wealth managers are no longer the only players offering wealth management services and products. Challenger banks, pension providers, insurance firms, super-apps, nonbank financial companies (NBFCs), and nonbank financial institutions (NBFIs) are entering the market and creating competition.

These emerging segments already have access to a large customer base supplemented by data insights on demographics and buying patterns. This enables them to remove silos for customers and simultaneously improve income streams by reducing churn risk.

Customers now can access investment services within an umbrella of existing offerings. While this is a win-win for both parties, it is making wealth managers apprehensive as they realize the critical importance of retaining and more effectively serving their current customers.

Rethinking growth versus profitability conundrum – impact of a potential slowdown?

While the pre-pandemic era was all about expanding and tapping into new customer segments, the strategy for serving various customer bases has significantly shifted. With the changing market dynamics, the focus has morphed from expanding and tapping into newer segments to building trust with existing customer segments and enabling hyper-personalized experiences.

A potential economic slowdown would have ripple effects on the wealth management industry. The focus on rapid growth would take a backseat as enterprises pivot their attention to reducing costs and improving profitability. This would directly impact tracking advisor productivity, improving advisor-to-client ratios, and enabling hyper-personalized experiences.

At the same time, providing access to emerging themes like Environmental, Social, and Governance (ESG) and digital assets will prove to be differentiators in the long run. Regulatory activity is heating up in the ESG space and will lead to corresponding technology implications for wealth managers’ IT estate, as previously discussed in our blog, New Sustainability and ESG Investment Regulations will Spur a Second Digitalization Wave in Wealth Management.

Technology implications – will the IT estate need to be re-examined?

The wealth management technology estate traditionally has been characterized by multiple disparate systems siloed by products or functions, fracturing the customer experience. At its core, wealth management grapples with a massive data problem – how to effectively analyze customer data, understand their journeys, and identify better cross-sell/upsell opportunities.

Wealth managers need an IT estate that is flexible enough to accommodate these hyper-segments and different products, and their underlying data to address these evolving demands at speed and scale.

Identifying the right platform partner, enabling product expansion via ESG and digital asset offerings, and quickly disseminating this information to advisors will be key priorities for wealth managers as they assess their technology estates.

Identifying the ecosystem strategy for system integrators and other technology companies to improve fractured customer experiences will be equally important for technology providers. At the same time, service providers also will need to orchestrate and assemble best-of-breed solutions for wealth management clients by building a robust partnership ecosystem.

As wealth managers grapple with these market changes, technology has never been more important to help them better prepare and tackle the potential challenges coming their way.

The key questions that need to be answered include:

  • How can the service cost be reduced?
  • How can the right tools be used to improve advisor productivity?
  • How can a microservices-based Application Programming Interface (API)-enabled composable core be built?
  • How can data be leveraged to enable personalized client experiences?
  • How can a scalable and purpose-built cloud infrastructure be used to run mid- and back-office operations on the cloud?

We are interested in hearing how wealth managers are preparing and tackling these market dynamics, and how this is manifesting in the conversations technology and service providers are having with clients. Please reach out to [email protected] or [email protected] to share your thoughts. In our next blog, we will look at the future state of the wealth management industry and provide a technology architecture blueprint for this space.

Learn more about how to deliver better customer experiences in our LinkedIn Live session, Frictionless Customer Experiences: The Key to Unlocking Satisfaction.

Experience, Data, and Trust – The Industrialization of Data-driven Personalized Experiences | Blog

Balancing experience with data and trust is essential to delivering engaging personalized experiences for customers and driving business success. Developing a robust and scalable automated process for data-driven personalization is critical for enterprises to win in the evolving personalization and interactive experience segment. Read on to learn more.  

Customer experiences have become increasingly prevalent with the democratization of the internet, coupled with significant technological and data processing advancements over the past few years. Enterprises are now realizing the value of prioritizing the people side of business. Creating positive personalized experiences for customers can foster loyalty, increase customer satisfaction, and drive repeat business. On the other hand, negative experiences can damage a reputation and reduce customer loyalty. Let’s explore the importance of personalization.

Personalization – then, now, forever

Personalization is not a new concept. It has existed for decades. Enterprises must capture users’ attention and stand out to thrive. According to Everest Group estimates, more than 70% of consumers interact with a personalized promotional message.

Personalization, more commonly known as “persona-based personalization,” mostly involves grouping users into segments or personas based on common characteristics or behaviors. This approach can be effective in delivering relevant content or offers to a large group of users with similar interests or needs, based on demographics, purchase history, or browsing behavior.

Today, technological advancements have changed the landscape. Categorizing consumers is difficult because they don’t have just one interest area. The plethora of information available online has shifted the power to consumers who determine their preferences, disrupting brands that are no longer in charge.

As a result, brands now are also adopting “person-based personalization,” a form of personalization that considers the individual’s unique needs and habits instead of categorizing the user into specific buckets. Personality-based personalization is a 1:1 approach, where enterprises focus just on the customer as an individual. Everything revolves around the individual as a person, ranging from interactive experiences to advanced personalized marketing strategies. While persona-based personalization involves a large sample size, person-based personalization involves a sample size of just the individual.

Because person-based personalization has the potential to deliver high returns on investment (ROI) to enterprises, deploying an industrialized process for real-time person-based personalization is essential.

While most brands have invested in personalization, some remain reluctant to fully embrace real-time data-driven personalization at scale, which involves personalizing every touchpoint in the customer’s journey based on real-time context. This method requires a unique interplay of data, intelligence, and omnichannel strategies. Developing an industrialized process for delivering individual personalization beyond the required data analysis is essential for enterprises.

Data-driven personalization at scale is the need of the hour

Data is the most critical requirement for delivering effective personalization. Personalization is driven by insights into individual preferences, behaviors, and needs that only can be obtained by collecting and analyzing data. Data collection needs to be well-thought-out. Enterprises require large volumes of data collected from multiple sources, and this data needs to be of good quality, accurate, and relevant because poor-quality data can lead to incorrect insights. Collecting diverse and up-to-date information is another important aspect.

The scope of data gathering has increased too. In the past, customer data was mainly collected via offline surveys, point-of-sales, and telecommunication, just to name a few. But the increased digitization supplemented with advancements in data and analytics has greatly impacted personalization by also allowing for collecting and analyzing vast amounts of data through digital channels. This has led to more seamless personalized experiences for users and has helped companies build deeper relationships with their customers.

An Everest Group study suggests that 78% of startups in the customer experience (CX) space leverage Artificial Intelligence (AI) to develop more relevant and engaging solutions for customer conversion, engagement, and retention. With the rise of AI, personalization has become even more precise and can consider a wider range of factors such as emotions, mood, and context.

However, significant investments are required if enterprises want to set up in-house industrialized data collection and analysis. This is where data platforms come into the picture. Data platforms can be thought of as purpose-built systems or infrastructures to collect, manage, and process large data amounts. It typically includes technologies and tools for data storage, data processing, data integration, data security, and data governance.

Data Experience Platforms (DXPs) offer a  collection of tools such as Digital Asset Management (DAM)Customer Relationship Management (CRM), Customer Data Platforms (CDP), and personalization tools that can meet the needs of enterprises, as illustrated below.

Exhibit 1. Data collection tools for aiding personalization efforts


How privacy and data guidelines affect user data collection

As discussed, data is essential to personalization. Clearly, the more data enterprises have, the better insights they can gain, and the better experiences they can provide. However, in today’s digital environment, user safety and trust are crucial. Consumer awareness is on the rise, with people growing increasingly skeptical about sharing their data. Concerns over how personal data is handled and safeguarded by enterprises are growing.

According to the United Nations Conference on Trade and Development (UNCTAD), 71% of countries today have some legislation around data protection and privacy, while 9% have draft legislation. Stringent data regulations such as the General Data Protection Regulation (GDPR) in the European Union, Nigeria’s Data Protection Regulation (NDPR), The California Consumer Privacy Act (CCPA), etc., have provisions to heavily penalize enterprises misusing consumer data.

Adding to this is the increasing push to eliminate third-party cookies. While browsers such as Apple Safari and Mozilla Firefox have already taken the step, market leader Google Chrome also has announced its intention to phase out third-party cookies by 2024, extending its earlier deadline. This has brought into focus the collection of voluntary data from users (Zero-party data) and first-party sources (1P data).

Zero-party data is a valuable information source for enterprises as it provides the best clarity to individual preferences. Developing a trust-based relationship with users and having total transparency about the use cases of zero-party data is essential for enterprises. Establishing a trust-based relationship might lead users to voluntarily provide more insights.

First-party data collection also needs to be transparent and strong security measures should be implemented to protect personal data. Sensitive data must be encrypted, security regularly audited, and effective access control measures adopted. Brands need to consider the needs of empowered users by honoring their “right to forget” and “untraceable” requirements.

As enterprises possess an enormous amount of users’ personal data, they also need to take the moral responsibility to protect that data. Customers who provide their data to enterprises understandably want their data to be protected and not misused without their knowledge. According to Everest Group estimates, more than 50% of customers are willing to share their personal data with companies but only with a clear understanding of how it will be used.

Combining automation with data and trust

Winning user trust and gaining access to more voluntarily provided data is no doubt essential to achieving better person-based personalization. But this data needs to be utilized in the best manner by making use of tools (such as personalization engines and marketing automation tools) to set up an industrialized workflow for large-scale 1:1 person-based personalization. Without a robust and scalable automated process for large-scale person-based personalization, enterprises tend to lose.

Exhibit 2. The industrialized workflow for achieving data-driven 1:1 personalization


Greater trust = Greater data = Greater personalized experiences

Personalization starts from a persona-based mechanism and, with an ever-increasing user base, shifts to person-based personalization. User data is the only way to go forward. User data and trust need to go hand in hand. To win customer attention, trust, and loyalty, enterprises need to know how to use the right data at the right time and how to go ahead with individual personalization without breaching the intrusion barrier.

Exhibit 3. Relationship between Trust and Personalization


The outlook

Overall, the personalization and interactive experience landscape has become more complex and diverse, requiring brands to constantly adapt and stay up to date on the latest trends and technologies to reach and engage customers. However, even with increasing investments, the ROI might decline due to the heightened competition making it more challenging to stand out and generate returns, technical limitations, and privacy concerns, just to name a few.

Enterprises need to break down their user base into smaller, more targeted segments to achieve 1:1 person-based personalization and tailor products, services, and experiences to each individual user’s specific needs and preferences. The smaller the segments, the better enterprises can tailor their personalization efforts and achieve a more effective 1:1 experience.

In addition to the investment level, the strategy and implementation of personalization and experience efforts also needs to be considered. A well-designed and executed strategy can generate returns even with increasing investments. By balancing experience with data and trust, companies can deliver engaging personalized experiences that build strong relationships with users and drive business success.

If you have questions about selecting the right data platform or want to know more about personalization, interactive experiences, or discuss developments in this space, reach out to our analysts at the Adobe Summit, or get in touch with the Everest Group team at [email protected], or [email protected].

To learn about the comprehensive roadmap for enterprises to achieve business outcomes and mitigate challenges in their journey to accomplish truly industrialized 1:1 person-based personalization, see our report Emergence of CDPs: Charting the Path to Data-driven Personalization.

Check out our webinar, Strategies for Customer Experience (CX) Success in an Uncertain World, to learn key trends and hear recommendations on what to prioritize to deliver exceptional CX.

The Role of Experience Service Providers (ESPs) in Extracting Value from Brand Communities | Blog

Through brand communities, companies can gain loyal, engaged advocates and customer insights that are key to personalization. With the help of engagement service providers, enterprises can realize tremendous business value by using this marketing channel. To learn more about the value of ESPs in unlocking the full potential of brand communities, read on. 

Why are brands suddenly talking about communities?

The hunger for social interaction and human connection that started during the pandemic has not subsided, fueling the continued growth of niche communities on social media platforms and offline self-help groups. Companies are realizing that strong brand communities can help create long-term brand advocates and have many other benefits.

Influencer marketing and social media marketing are proliferating – from thriving online blockchain NFT communities such as CryptoPunks to strong offline communities that are avenues for in-person events like fitness brand Gymshark.

How can brands leverage communities for personalization?

With Google sunsetting third-party tracking cookies, marketers will need to quickly adjust their strategies to use first-party data directly from customers to champion true personalization.

Beyond solely capturing behavioral first-party data, brands have an opportunity to incentivize customers to voluntarily share zero-party data that a customer intentionally and proactively shares with a business, which will be paramount for personalization.

This is where brand communities come to the rescue – making highly credible customer data available on both an individual and aggregated cohort level, expanding the scope for effective customer engagement.

In addition to being a source of high-quality, sustainable customer data, let’s explore how communities also can help brands in several other enticing ways.

 Six possibilities that come with brand communities:

  • Actionable insights across the customer journey – Starting from the discovery phase with display ads and FAQs to building loyalty through customer stories and peer answers, communities help brands engage with customers across all touch points and gather meaningful insights to incrementally enhance customer experience
  • Self-sufficiency mindset to minimize support cost – Most customers are self-solvers and communities give them access to the ears of other customers facing similar issues and multi-department company teams in one place. This leads to faster problem resolution for customers and reduced support costs for enterprises
  • Co-creation of products – Communities can help product teams gather continuous customer feedback for testing concepts, validating roadmaps, and prioritizing product backlogs at every stage of the product planning lifecycle
  • Acquisition through advocacy – Customers tend to trust other customers when they share testimonials. Brands can leverage communities to organically acquire new customers by identifying brand advocates and incentivizing them to share their experiences
  • Experience-based marketing for retention – Brands also can use these platforms to create engaging experiences such as competitions, events, discussion boards, and surveys, keeping customers hooked and further enhancing retention
  • Reusable user-generated content – Community-created content such as food reviews, skincare routines, fashion looks, or DIY projects can be reused in emails, ads, product pages, etc. to drive revenue and cut content creation costs

How can ESPs help brands build sustainable communities?

While communities bring a plethora of opportunities for enterprises to meet their personalization goals, brands struggle to extract tangible Return on Investment (ROI) from community engagements because they frequently lack a sustainable customer engagement strategy.

Also, when it comes to choosing the right technology platform for building communities, the extremely fragmented technology landscape makes it difficult for brands to evaluate the right fit for their custom needs.

This is where the role of ESPs becomes extremely crucial, as illustrated below.

Exhibit 1: The role of ESPs in extracting value out of brand communities 

Engagement strategy ESPs need to devise a strategic implementation roadmap in collaboration with creators and influencers to create impactful communities for brands from the ground up. They also need to provide hand-holding support to brands who have been unable to scale their community efforts due to the lack of strong engagement strategies
Technology implementation ESPs will need to either partner with existing community platform vendors such as Tribe and Vanilla Forums or create their own tech landscape for embedding data inputs from community platforms into customer data platforms (CDPs). They will need to meld insights from communities to continuously enhance the customer’s 360-degree profile for personalization
Managed services (experience operations) Since communities take a longer time to generate value and need continuous content and security support, ESPs can provide the benefit to upstart communities of already having technology expertise and also deliver support services to brands with existing communities

Investing in creating a new successful community might seem like a daunting task, but enterprises need to draw on learnings from leaders such as Starbucks, Harley-Davidson, Sony PlayStation, and SAP, which are already reaping significant benefits from their communities.

ESPs also need to spread their knowledge and educate clients about this largely untapped market and begin building their tech ecosystem for this opportunity to get ahead of their peers.

Promising outlook for ESPs

With skyrocketing customer acquisition costs, relying on growth through paid media to create truly personalized experiences becomes increasingly difficult. Adopting cost-effective alternatives for achieving sustainable customer loyalty is crucial for enterprises. Successful brand communities can become the secret sauce for gaining long-term competitive advantage in the race for hyper-personalization.

ESPs will play a crucial role in actualizing the returns from communities for enterprises. Providers need to kick-start the process by educating clients about the tremendous benefits of using this marketing channel while also building robust technology architecture to support long-term business outcomes.

To discuss further, contact [email protected] or [email protected].

Learn more about how to create hyper personalized customer experiences in our webinar, Strategies for Customer Experience (CX) Success in an Uncertain World, for recommendations on what to prioritize to deliver exceptional customer experience.

Will It Be Happily Ever after Post Veeva-Salesforce Divorce?

With the Veeva-Salesforce marriage splitting in 2025, can the two long-time partners remain business friends? Read on to learn what the end of this life-sciences CRM partnership will mean for each of the companies, enterprises, and customers.

The fairy-tale beginning!

Veeva and Salesforce are the front runners in the life sciences-focused customer relationship management (CRM) and commercial technology landscape, with their exclusive focus on Pharmaceutical and MedTech domains, respectively (with a solid non-compete agreement in place). Veeva originated as a spinoff from Salesforce with the potential to disrupt the pharmaceutical CRM space with cloud software. As such, Veeva CRM was built on the Salesforce platform, and Salesforce has been foundational to the building of Veeva ever since. Very soon after its formation, the newly forged Veeva team started developing life sciences-focused applications, spanning the life sciences value chain areas, on a new platform, Veeva Vault. This platform has an applications suite well-spread across the life sciences value chain areas. To date, most Veeva applications related to clinical operations, quality, regulatory, safety, etc., are hosted on Veeva Vault, while Veeva CRM (including solutions for customer experience management, multichannel engagements, and real-time insights) is hosted on Salesforce.

Mid-relationship crisis!

Too many risks added cracks to the Veeva and Salesforce partnership. Veeva, with its dependence on third-party IT infrastructure (Salesforce and AWS) for Veeva CRM, has always been wary of the risks associated with the partnership structure. Some of the highlighted risks include:

1 2
Exhibit 1: Key risks associated with the Veeva-Salesforce partnership
  1. Suboptimal customer experience: Salesforce (and even AWS) have faced significant service outages in the past, and Veeva knows the repercussions this can have on overall customer experience
  2. Market/geography restriction: Veeva is highly dependent on Salesforce in terms of markets where it can sell its CRM. In addition to this geo-restriction, Veeva also will be left stranded if Salesforce exited any existing markets
  3. Domain expansion restriction: Veeva is legally restricted from expanding into the MedTech CRM domain (where Salesforce is the market leader). This puts a potential roadblock in Veeva’s future expansion strategy (and a possible limiting factor to achieving its goal of US$3 billion in revenue by 2025)
  4. Competitor product possibility: While the same agreement also limits Salesforce from selling its products in the pharmaceutical domain, it does not restrict Salesforce’s customer’s ability (or the ability of Salesforce on behalf of its specific customer) to customize or configure the Salesforce Platform to suit their pharmaceutical commercial operations. As such, Veeva’s current or potential customers can prioritize building custom applications over buying Veeva’s products
  5. High exit/platform shift cost: The cost of shifting the Veeva CRM to an alternate platform is exorbitant. In extreme scenarios, if Salesforce decides to annul the agreement on short notice, it will disrupt Veeva CRM and will massively affect all Veeva customers, leading to an indelible mark on the Veeva brand

The divorce!

In its Q3 earnings call for 2022, Veeva announced that it will not renew its Salesforce partnership when it expires in September 2025. As such, it will be moving the Veeva CRM to the Veeva Vault platform. With the agreement’s five-year wind-down period, existing customers can continue with Veeva CRM on the Salesforce platform through September 2030.

Implications for Veeva

Exhibit 2: Implications for Veeva
  1. Superior customer experience: Veeva will be able to offer a better end-to-end experience to its customers with all the solutions and applications (ranging from the clinical and R&D areas to sales and marketing) hosted on a common Veeva Vault Platform. This also will let Veeva provide first-hand and more personalized service (hence, better SLAs) to its customers by leveraging a strong service partner ecosystem that includes partners across avenues (geographies, therapy areas, functions, etc.)
  2. Cost optimization: While Veeva stakeholders cite better customer experience as a key reason to move from the Salesforce platform to its own, a cost-related underbelly exists in this relationship – known as the “cost of subscription service.” This is the cost that Veeva has to pay to host its applications (including Veeva CRM) on third-party infrastructure (such as Salesforce and AWS). In 2022, this cost was equal to 12% of the total annual revenue. Moving Veeva CRM to Veeva Vault will let Veeva optimize this spend from its profit realization equation
  3. Growth: Veeva has outlined a very optimistic US$ 3 billion goal for 2025 (meaning a healthy growth rate of approximately 35% from 2022 to 2025). While its pharmaceutical-focused CRM business is expected to grow, with the Veeva-Salesforce relationship coming to an end, we can expect Veeva to foray into a MedTech-focused CRM as well. MedTech, although a much smaller part of the overall life sciences CRM pie, is touted to grow much faster than other domains. This can be a potential growth engine for Veeva to achieve its goals
  4. No access to Salesforce: Post 2025, Veeva will no longer be able to access Salesforce’s range of accelerators, tools, and partners. On the flip side, this is a potential opportunity for Veeva to beef up its capabilities in these areas. Additionally, with Salesforce out of the picture, Veeva will need to withstand enterprise expectations around scalability, value proposition, and change management

Implications for Salesforce

  1. Loss of revenue: Salesforce will lose the annual subscription service revenue stream coming from Veeva. However, since this amounts to less than 1% of total Salesforce revenue, we do not expect it to create a major dent in Salesforce’s annual revenues
  2. Opportunity to strengthen its life sciences product portfolio: Similar to Veeva’s opportunity to expand into the MedTech space (where Salesforce is the market leader), Salesforce will have the freedom to expand into the pharmaceutical CRM space (where Veeva is the market leader). This is a bigger opportunity of the two, given the larger size of the pharmaceutical CRM market

How should enterprises plan for the split?

Enterprises should start planning their next steps as the two companies go their separate ways. While customers may be concerned about the company’s move from Salesforce to Vault for the CRM offering, an extended period will be available to transition. By mapping out transition journeys today, enterprises will have a better chance for a seamless shift.

Enterprises also can now expect products from both Veeva and Salesforce in the MedTech and pharmaceutical spaces, so life sciences customers can plan out which product they want to run with. As the companies sever ties, however, enterprises will want to be more aware of rising pricing and licensing fees, making it plausible to look elsewhere if the price point and product are no longer a fit.

Exhibit3: What should enterprises do?

1 Pharmaceutical includes pharmaceutical and biotechnology industries for human and animal treatments.

If you have questions about current CRM trends or would like to discuss developments in this space, reach out to [email protected] or [email protected].

Discover more about the current CRM landscape and explore customer experience strategies for life sciences enterprises in our webinar, How to Deliver Hyper-personalized Customer Experiences in Life Sciences.

ChatGPT Trends – A Bot’s Perspective on How the Promising Technology will Impact BPS | Blog

What better way to find out how ChatGPT will impact the Business Process Services (BPS) market than to ask the trained chatbot itself this question? According to its answers, the future looks promising. But obstacles still need to be overcome. Learn about the latest ChatGPT trends in this second part of our series.

Since OpenAI released ChatGPT for public testing in November 2022, ChatGPT has generated a lot of buzz. Based on initial impressions, the technology holds great promise to enhance and revolutionize many industries, including customer experience, healthcare, logistics, banking, and education, among others.

With all the attention, it’s natural to wonder how ChatGPT will impact the BPS market. And how better than to hear it straight from the bot? So, our analyst logged in on a session with ChatGPT and had a very direct and long conversation. Here’s what we learned:

Figure 1A Snippet from a conversation with ChatGPT

ChatGPT’s potential to enhance customer experience is fairly well known. It has shown the promise to improve current conversational Artificial Intelligence (AI) solutions and make them sound more human-like, which can significantly change how these services are delivered.

It is already capable of understanding natural language with high accuracy, and with enough training, it can start with taking on simple tasks at contact centers. ChatGPT also can track customer preferences and provide real-time insights that can unlock new opportunities for enterprises.

Exploring ChatGPT trends beyond experience

We were interested in understanding its impact beyond customer experience in other major areas such as back-office, content moderation, and finance and accounting, so we asked ChatGPT.

Below is a summarized finding of how ChatGPT can revolutionize six key areas, according to the conversation. (And we have no reason to believe it might have been exaggerating, unlike, say, an analyst writing something similar).

  • Back-office: Can automate back-end processes such as data entry, record keeping, and reporting, freeing up employees for more value-adding work
  • Content moderation: Can assist with content moderation by automatically detecting and flagging potentially harmful or inappropriate content, improving efficiency and accuracy compared to manual moderation
  • Human resources: Can automate repetitive tasks such as candidate screening, resume filtering, and scheduling interviews, freeing up HR staff for more value-adding work. It can provide quick and accurate responses to candidate inquiries, improving the overall candidate experience and making the hiring process more efficient. Another use is virtual interviewing, making it easier for HR to conduct interviews with candidates located in different locations
  • Financial and accounting: Can automate tasks such as invoice processing, expense reporting, and budget tracking, freeing up finance staff for more value-adding work
  • Supply chain: Can assist with supply chain management by providing real-time visibility into inventory levels, shipment status, and other supply chain data, enabling companies to make data-driven decisions and optimize their supply chain
  • Procurement: Can automate procurement tasks such as vendor management, purchase order creation, and invoice processing, helping procurement teams work more efficiently and effectively

The answers show the technology can potentially have positive repercussions across major areas within BPS. With such huge potential, ChatGPT is expected to impact talent as well. While demand may decline for low-skill jobs such as data entry and transactional customer service, ChatGPT will require new skills such as AI and data analysis, creating new job opportunities in areas such as conversational AI design and deployment. As enterprises adopt ChatGPT and other AI technologies, developing new skills and staying up-to-date with industry trends and advancements will become increasingly important for employees.

While the technology is certainly promising, several factors must be considered for successful implementation, including ethical and legal considerations (such as data privacy and algorithmic bias), integration with existing systems, quality of training data, human oversight, and ongoing development and improvement.

ChatGPT has the potential to significantly impact various areas within BPS. While challenges exist, careful planning and considering factors such as data privacy and ethical implications can lead to successful implementation and ongoing improvement. With careful investments, planning, and further technological advancement, ChatGPT can reach its full potential before too long.

For the first part in our series, see ChatGPT – Can BFSI Benefit from an Intelligent Conversation Friend in the Long Term? To discuss ChatGPT trends, please reach out to Sharang Sharma.

ChatGPT – Can BFSI Benefit from an Intelligent Conversation Friend in the Long Term?

With the advent of chatbots reaching human-like sentience and mannerisms, and banks being at the forefront of adopting conversational Artificial Intelligence (AI), the question arises whether ChatGPT threatens the likes of Google, other AI platforms, and the non-critical workforce in the technology and services industries. While its promise remains high, will the banking, financial services, and insurance (BFSI) sector unearth ChatGPT’s full potential?  Read on to find out.

ChatGPT has taken the internet by storm and has become a trending sensation overnight. This AI-powered innovative chatbot has taken the world for a spin and is generating a big buzz among millions of professional users experimenting with it. Microsoft has also invested billions in the tool.

But what is ChatGPT? Developed by OpenAI, it is a generative language model that has been trained over large volumes of text to generate human-like responses. Like a search engine, it curates answers for queries but is designed to answer in a more conversational flow that goes beyond chat and delivers a richer experience with an intelligent chatbot. The AI engine generates solutions for all sorts of queries, including R, Python, and VBA codes.

Let’s explore ChatGPT’s potential to impact the future of AI and its usage in the technology and services industry, particularly by financial institutions, banks, and insurers.

What makes ChatGPT approachable and different to use?

  • The amount of data used to train the GPT model
  • Human-like interaction
  • Versatility and variety of responses
  • Low data input requirements
  • Highly scalable
  • Adjustable coherence and adaptability

What does it mean for banking and financial services?

Banks can use ChatGPT in several ways to enhance their operations and customer experience. Here are a few examples:

  1. Assistive chatbots: ChatGPT can be used to build natural language-based chatbots that can assist customers with common inquiries, such as account balances, transaction history, and bill payments. The chatbot also can guide customers through more complex processes like applying for a loan or a credit card. It also could help increase agent efficiency by aggregating requests by type to the appropriate departments
  2. Automation of simple and repetitive tasks: ChatGPT, along with other conversational AI models, can be used to automate simple and repetitive tasks, such as customer service interactions, order processing, and data entry. This can increase efficiency and lower costs for service providers and their clients
  3. Customer service: ChatGPT can assist the human agent in answering customer questions, improving efficiency and response time, and providing more accurate and detailed information. This can improve customer service and satisfaction and employee onboarding
  4. Marketing: Banks can use ChatGPT to analyze customer data and build personalized marketing campaigns that target specific customer segments. It also can generate personalized responses to customer inquiries by fine-tuning the model to a specific client, enabling it to generate tailored responses to their needs
  5. Decision Making: With the right database connections and integrations, ChatGPT can be used to analyze data to generate insights that can be used in decision making
  6. Learning and development: ChatGPT can be used as a learning and development tool. It can be trained with a company’s pre-existing data to create learning tools and modules and as an onboarding tool for new employees

Current mapping of ChatGPT to the BFS BPS value chain




Current use cases of ChatGPT in banking and financial services (BFS) and business process services (BPS) operations are limited. Building capabilities around conversational AI and incorporating ChatGPT into offering portfolios can help BFS and BPS firms unlock innovation. Enterprises such as Microsoft, AWS, and Meta are developing their capabilities internally or through partnerships with conversation AI specialists.

Industries leading in innovation investments are becoming early adopters of ChatGPT. Microsoft is reportedly investing US$10 billion in OpenAI and plans to introduce it along with its Azure OpenAI service bundle in the Bing search engine. This furthers Microsoft’s stake in the market, where it already has a working partnership with, one of the market’s leading conversation AI providers, since 2019.

Current capabilities still have hurdles to overcome

Although ChatGPT appears to have multiple uses and strengths, some limitations include:

  • Biased and inconsistent output: Content generated by ChatGPT depends on the trained data, making it prone to biases. It is difficult to achieve the same level of consistency in output generated. Cases requiring more context and complexities may lead to biased and inconsistent output. When training for complex operations such as trade reconciliation, exception management, and know your customer (KYC) remediation, the subject matter experts (SMEs) must be well-versed with minute details, which can’t be guaranteed when using ChatGPT
  • Standardized data requirement: ChatGPT cannot process different file types or extract information from them. A lot of consumer data is often received in varied file types and formats that require intelligent operations to skim through and sort, which is beyond ChatGPT’s current text-based data capabilities
  • Largely text driven: Its text-based generated content can fall short of expectations for the coming generation of users that desire more visual stimulation. Dashboards and descriptive analytics have become a basic requirement of all transaction-intensive industries that ChatGPT cannot fulfill
  • Limited ability to handle sensitive customer information: ChatGPT may not have the necessary security and privacy measures to handle sensitive customer information, such as account numbers or personal identification numbers. With the ever-evolving compliance norms varying across industries, it doesn’t yet have the capability or the secure framework to process, analyze, and interpret KYC or transaction data
  • Outdated information: ChatGPT’s information database is limited to data up until 2021 and can result in outdated opinions and facts. Deals, news, and updates in recent years aren’t recorded. For a constantly-evolving industry like BFS, where new deals and contracts dictate the capital markets, this makes the source of information unreliable
  • Ethical concerns: As artificial intelligence improves, the lack of proper credit for AI-generated content is becoming more widespread. The distinction between content created by AI and content created by humans is becoming less clear, causing confusion, mistrust, and ethical dilemmas
  • System Integration issues: Incorporating new technology with outdated systems can be difficult due to potential incompatibilities and differing protocols or data formats. This can decrease efficiency, add complexity, and impair interoperability

 Where will the future take ChatGPT?

While ChatGPT’s future looks promising, it is too early to say the product will revolutionize banking and financial services. Before it gets integrated into banking products, it needs to overcome several hurdles, including:

  • Responding to competition from rising financial technology (FinTech), regulatory technology (RegTechs), and other AI/Machine Learning (ML) service providers
  • Meeting regulatory, compliance, and cybersecurity requirements
  • Catering first to front-office requirements for low-critical queries and then for more complex queries and back-office operations that have not yet been explored
  • Maintaining high operational efficiency, accuracy, and customer satisfaction
  • Expanding variation in output categories
  • Overcoming the lack of recent factual data

Though ChatGPT use cases are promising, it is still a machine learning model that needs modifications to be used in real-world applications. The model would have to consume specific industry data to build domain depth and be programmed to manage contextual nuances for various tasks. Its ultimate success would depend on end customers’ user experiences.

While the road is being paved for innovation, ChatGPT still has a long way to go before making strides into banking and financial services.

To further illustrate the nature of results and drill down on the capacity of ChatGPT, below are some screenshots for financial crime and compliance queries (platforms, codes, advisory):





If you have questions about banking and financial services trends or would like to discuss developments in this space, reach out to [email protected], [email protected], and [email protected].

Also, download our Navigating the Regulatory Tightrope via End-to-End Solutions – Financial Crime and Compliance (FCC) State of the Market 2022 report to explore key trends. Stay updated by following the latest research on Banking and Financial Business Process Services.

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