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Top1.0 Introduction
Incorporating ICT and technology with businesses in financial services has evolved, leading to complete revolutionising of the financial sector. However, there are various definitions and views of fintech, e.g. some scholars see the adoption of fintech as the use of technology in financial services, analysing data using automation, and translating output to improve a firm’ purpose and delivery to its consumers (Vives, 2017; Schueffel, 2016). Technological developments, especially in banks, transformed the way consumers interact with banks as well as how they manage their finances. This has led to fintech reshaping customers’ expectations and setting new and high bars for user experience due to the rapid innovation of Artificial Intelligence (AI) within the sector (McWaters, 2017; Nicoletti et al., 2017; etc.).
The emergence and use of electronic applications and Artificial Intelligence (AI) have made a phenomenal impact on many existing firms and led to the creation of new types of businesses in the economy (Raghubansie, et al., 2015; and El-Gohary, 2011). AI is defined as a “grouping of methodologies backed by data and includes logic, networks, algorithms, embedded probability functions, and machine learning capabilities” (Binner et al., 2004, p.10). AI has enabled firms' formation with capabilities of being 100% digital, especially in sectors previously presumed impossible, and enabled a level of customer experience never thought of across various sectors (Hoyer et al., 2020; and Ameen et al., 2020). This is currently present in the financial industry, specifically in the banking sector, as Neobanks have become increasingly popular. The outstanding features of Neobanks are their reliance solely on cloud-based software, no physical presence for consumers to visit, adaptability, and they are becoming progressively more successful with the ease to use data to drive innovation (Kline, 2015; and Bradford, 2020).
Meanwhile, Customer Experience (CX) is continuously at the core of any firm, predominantly as a metric to measure satisfaction or otherwise. Consumers’ expectations of the customer experience they receive have heightened and changed throughout time due to many reasons. Such experience is imperative in creating customer value (Eid and El-Gohary, 2015a; and 2015b). In the financial sector, the constant innovation and adoption of technology have been reasons for the rapid change in consumer expectations. This has put some pressure on firms to remain relevant and adapt such changes along with their customers. There are several definitions of CX, such as the one of Klaus and Maklan, 2013: “customer’s cognitive and affective assessment of all direct and indirect encounters with the firm relating to their purchasing behaviour” (Klaus and Maklan, 2013). Moreover, Schwager and Meyer, 2007 view it as: “the internal and distinctive response customers have to their dealings with a company” (Schwager and Meyer, 2007). Both definitions allow for evaluating how or if AI has affected CX and customers’ purchasing behaviour.
Due to the explosion of technology, there is a turbo effect on innovation (Shaw and Ivens, 2002, p. 17), thus forming the relationship between Artificial Intelligence and Customer Experience. This has led businesses in the banking sector to adopt AI-enabled technologies and create AI-powered CX Chatbots, also known as Virtual Agents (VA). Among several benefits, the use of machine learning in AI allows a firm to reduce its costs. Still, the improvements they make in CX are more impactful due to the bots availability of 24 hours, seven days a week, ability to learn, answer standard questions objectively, perhaps without any human error. Due to the natural language capabilities of a VA, there is a possibility of difficulty in confirming whether customers are interacting with a human or, in fact, a VA (Kannan and Bernoff, 2019).
In the later part of the past decade, the popularity of Neobanks increased and created particular traction with millennials and the underbanked. This is mainly due to their continuous approach to improving customer experience and has recently exacerbated by the recent COVID-19 pandemic that has led to banking solely from home (Kline, 2015; and Remolina, 2020). They commonly provide the same services that big banks offer, such as savings accounts, credit cards and paper checks. This allows the opportunity for consumers to hold their primary bank account with Neobanks rather than with a traditional banking firm (Kauflin, 2019; and Temelkov, 2020).
Therefore, this study has three main aims, which are: