# How banks can use the latest AI text analytics to improve customer loyalty
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2019-02-27
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: How AI Text Analytics Boosted Customer Loyalty for a Major
Meta Description: Discover how a major UK bank improved customer loyalty and reduced operational costs using AI text analytics platform PrediCX by Warwick Analytics.
URL: https://financedigest.com/banks-can-use-latest-ai-text-analytics-improve-customer-loyaltyhtml

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By **Dan Somers**, CEO at Warwick Analytics ( [www.warwickanalytics.com](http://www.warwickanalytics.com))

A major UK bank was looking to improve its customer loyalty. It was already using the latest analytical tools including social listening, sentiment analysis and a large data science team but they were experiencing limitations and not making enough progress.

The bank was keen to find more opportunities to improve customer loyalty and reduce their operational costs by gaining more customer insight. They were also [interested to see](https://www.financedigest.com/portugal-pm-welcomes-lufthansas-interest-in-tap-scholz-sees-good-fit.html "Portugal PM welcomes Lufthansa’s interest in TAP, Scholz sees good fit") what online feedback their main competitors were receiving.

The bank invited Warwick Analytics, specialists in AI text analytics, to carry out [analysis using their automated](https://www.financedigest.com/automated-liquid-handling-systems-market-global-leading-companies-analysis-revenue-trends-and-forecasts-2027.html "Automated Liquid Handling Systems Market Global Leading Companies Analysis, Revenue, Trends and Forecasts 2027") text analytics platform PrediCX.

Some [key outcomes from the analysis](https://www.financedigest.com/alanine-market-key-players-swot-analysis-key-indicators-and-forecast-to-2029.html "Alanine Market Key Players, SWOT Analysis, Key Indicators and Forecast to 2029") included:

- £200m per annum of churn mitigation was identified through operational opportunities
- £240m per annum of churn mitigation was identified through CX opportunities
- [Customer Service savings opportunities of £20m per annum through automation](https://www.financedigest.com/why-no-code-beats-custom-software-and-turnkey-solutions-for-business-automation.html "Why no-code beats custom software and turnkey solutions for business automation")
- Ongoing tactical opportunities identified for [marketing effectiveness](https://www.financedigest.com/the-npwt-suction-pads-market-to-grow-on-an-effective-and-accessible-note-backed-by-innovation.html "The Npwt Suction Pads Market to grow on an effective and accessible note backed by innovation") and propensity

**The analysis**

PrediCX analysed Tweets associated with the bank, and 23 of their competitors, over a 3 month period.

Sentiment Analysis can present issues with accuracy, context and multiple sentiments. The [technology overcomes these by using the latest](https://www.financedigest.com/cardiac-valvulotome-market-growth-latest-trends-top-players-competition-technological-advancements-outlook-and-forecast-2028-2.html "Cardiac Valvulotome Market Growth, Latest Trends, Top Players, Competition, Technological Advancements, Outlook and Forecast 2028") in machine learning and AI to classify by ‘concepts’ instead of ‘key words’. The result is a highly tuned model, built in a [single day](https://www.financedigest.com/record-number-of-migrants-arrive-in-britain-by-boat-on-a-single-day.html "Record number of migrants arrive in Britain by boat on a single day"), with thousands of classes that pick up signals of issues,customer sentiment and more importantly customer intents.

Automation is optimised with ‘human-in-the-loop’ functionality which means it only asks for human input when it needs validation and it then trains itself behind the scenes.

**Key findings**

The automated [analysis found several key opportunities](https://www.financedigest.com/animal-drug-compounding-market-trends-business-strategies-and-opportunities-with-key-players-analysis-2030.html "Animal Drug Compounding Market Trends, Business Strategies and Opportunities With Key Players Analysis 2030") for improvement and savings:

Firstly, the key topics of conversation were classified and then broken down into many classes of detailed, statistically-relevant signals. Service and [Customer Service emerged as the most common topics for the majority of the banks](https://www.financedigest.com/the-bank-of-me-why-banks-need-to-be-totally-customer-centric.html "The bank of me – why banks need to be totally customer centric").

The AI then classified the [detailed intent of the customers to get a deeper understanding than existing sentiment analysis](https://www.financedigest.com/poly-cotton-fabric-market-detailed-analysis-of-current-and-future-industry-figures-till-2020-2030.html "Poly Cotton Fabric Market Detailed Analysis of Current and Future Industry Figures till 2020-2030") was able to provide. The larger banks displayed the highest churn with challengers and mid-tiers performing better. The supermarket [banks generally had low](https://www.financedigest.com/credit-suisse-shares-hit-record-low-after-report-bank-is-looking-to-raise-cash.html "Credit Suisse shares hit record low after report bank is looking to raise cash") churn but very high negative advocacy, representing a customer base who are all not 100% happy, but much more loyal. When breaking down the root causes of customer churn, it was evident that customer service, branch and ATM closing and [interest rates](https://www.financedigest.com/london-stocks-slip-ahead-of-key-interest-rate-decisions.html "London stocks slip ahead of key interest rate decisions") all caused the greatest churn in the market.

The amount of effort expended by [customers at different banks](https://www.financedigest.com/insight-into-tomorrows-retail-banking-customers.html "INSIGHT INTO TOMORROW’S RETAIL BANKING CUSTOMERS") to set up new products was also analysed. [Current accounts](https://www.financedigest.com/euro-zone-current-account-swings-back-to-a-surplus-in-june.html "Euro zone current account swings back to a surplus in June"), business accounts and mortgages are associated with the most proportional churn whilst current accounts and mortgages were the most challenging to set up (ancillary services such as share accounts, notary services etc. are also highly negative but very small).

For the customer services teams, there seemed to be distinct patterns of churn and comments based on time of the [day and day of the week](https://www.financedigest.com/transitioning-into-a-4-day-week.html "Transitioning into a 4 day week"), indicating opportunities for customer service resourcing.

Finally, the [bank was able to get a cross market](https://www.financedigest.com/improving-reputation-in-the-banking-sector-through-marketing-communications.html "IMPROVING REPUTATION IN THE BANKING SECTOR THROUGH MARKETING COMMUNICATIONS") analysis of who and when customers were churning with their competitors. This highlights when different banks are strong or vulnerable and could present tactical [marketing opportunities](https://www.financedigest.com/uv-disinfection-equipment-market-opportunities-demand-and-revenue-forecast-2025-tmr-study.html "UV Disinfection Equipment Market Opportunities, Demand and Revenue Forecast 2025 – TMR Study") i.e. targeting potential customers and increasing switching propensity.

**Conclusion**

A number of [key recommendations for the bank](https://www.financedigest.com/russia-bans-western-investors-from-selling-banking-key-energy-stakes.html "Russia bans Western investors from selling banking, key energy stakes") were identified just by this analysis alone:

- Estimated 20% of churn is caused by incidents and this represents maximum opportunity.
- 10% improvement is c. £200m pa [revenue compounded yearly](https://www.financedigest.com/german-tax-revenues-fall-in-august-for-first-time-this-year.html "German tax revenues fall in August for first time this year")
- Comparable best-in-class churn e.g. Nationwide is 25% lower.
- Potentially a further 10% i.e. c. £200m opportunity with improvements
- [Online and mobile banking](https://www.financedigest.com/online-banking-benefits-and-risks-of-managing-your-finances-online.html "Online banking: benefits and risks of managing your finances online") is a key issue, and is causing direct churn
- Sentiment is middling. It does not appear to correlate to churn for the market
- Drivers of churn are mostly customer service, branch closures, marketing offers,
- interest rates and vulnerability issues
- Early warning can help predict churn tactically and intercept likely churners
- 28% of Tweets and potentially all non-voice queries can be automated. This could be £20m pa saving
- Business banking, [current accounts](https://www.financedigest.com/coffee-current-accounts-and-the-commoditisation-conundrum.html "Coffee, current accounts and the commoditisation conundrum") and ancillary services have the highest churn,
- and insurance the highest negative advocacy
- Mortgages, current accounts, savings and overdrafts cause the most attritional set-up.
- Opportunity to improve the journey
- There are distinct patterns and opportunities to change customer services planning
- over the week and [day to reduce churn and costs](https://www.financedigest.com/when-is-the-cost-of-electricity-the-cheapest-in-a-day.html "When Is The Cost Of Electricity The Cheapest In A Day?")

It’s clear to see how the adoption of the [latest machine learning for text analytics can present far more insight](https://www.financedigest.com/cosmetic-packaging-market-to-gather-traction-in-developing-countries-latest-insights-by-transparency-market-research.html "Cosmetic Packaging Market to Gather Traction in Developing Countries, Latest Insights by Transparency Market Research"), a much deeper level, than traditional sentiment analysis and text analytics. More significantly it is able to correlate these signals to operational issues to reduce costs and [improve customer](https://www.financedigest.com/how-artificial-intelligence-can-help-improvethe-customer-journey-in-insurance.html "How Artificial Intelligence can help improve the customer journey in Insurance") loyalty.

With the [latest technology](https://www.financedigest.com/cardiac-valvulotome-market-growth-latest-trends-top-players-competition-technological-advancements-outlook-and-forecast-2028.html "Cardiac Valvulotome Market Growth, Latest Trends, Top Players, Competition, Technological Advancements, Outlook and Forecast 2028"), this level of insight can be set up in a matter of days, delivered in near real time and without the need for a data scientist to maintain the model.


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