Adding empathy to the metrics mix

Published on the 12/06/2019 | Written by Heather Wright


Pegasystems empathy tool

AI empathy tool to guide ethical business decisions…

If Pegasystems gets its way, empathy will soon be part of the metrics mix for big business.

The enterprise software company, whose decisioning platform is used to analyse customer data and recommend ‘next best actions’ announce the addition of a customer empathy capability to its Customer Decision Hub at Pegaworld last week.

The company, which is using the tagline ‘mind (AI), muscle (robotics), heart’, says the tool takes the decision hub analysis a step further to examine how empathetic ‘next best action’ recommendations are and offers ‘a more compassionate approach’.

While it sounds very touchy feely (in a very PC way), Pegasystems says there’s business sense in being more empathetic, claiming it is often ‘the most profitable strategy’.

And while it’s tempting to scoff, Pegasystems customers attending the conference appeared to be converts.

Those customers include Commonwealth Bank of Australia, which has been using Pegasystem’s decisioning engine for several years.

Speaking to iStart at Pegaworld, Alex Burton, CBA retail bank head of data and decisioning strategy, said the platform is ‘the brain in the centre of all our communications with customers for the retail bank, and growing into the business banking space as well’.

It’s a brain that operates across 18 channels and makes around 22 million real-time decisions a day covering sales, services and mandatory compliance.

“We also run a batch in the morning where we run through the entire customer base with all the different conversations we could have, and we work out whether it’s worth reaching out to a customer as well.”

“We’ve got the ‘should we’, the ‘can we’ and then the AI telling us it can detect a need in the customer.”

That batch covers some 25 million customers, Burton says.

Burton says the Pega decisioning platform enables CBA to code in the hard ‘can we’ rules – such as the legalities of selling a product and legislation – along with ‘the empathy discussion’.

“We’ve also hardcoded in the ‘should we’ test – so is this suitable for this customer in this part of their lifecycle, in Pega, so there is less chance for staff to get it wrong.

“Then we use the AI portion to work out whether the customer actually needs something or not. So we’ve got the ‘should we’, the ‘can we’ and then the AI telling us it can detect a need in the customer.”

Burton says the other side of the equation is using the engagement to build better relationships and rebuild trust through things such as reminding them their credit card fee is due, helping them avoid fees or helping with their financial wellbeing.

So what are the tangible benefits for CBA?

Burton says the bank has been able to engage and personalise the experience for customers much better. “We find that when we have had a ‘next best’ conversation with one of our customers we find the MPS is a very positive experience.

He says the platform has also bolstered sales, though he declines to give specifics on that front.

“We’ve seen proprietary lending going up instead of down and brokers were going up at the same time, so we haven’t had to cannibalise one side of the market.”

Staff too, are happier with the conversations they’re prompted to have with customers ‘because they’ve seen the effect they can have with the customers and how they can delight customers when they are right’.

“Culturally, we are moving much more to a ‘should we’ conversation already,” Burton says of introducing more empathy into business. “That has already permeated its way into the kind of conversations we put into the customer engagement engine.”

The banking sector is a key sector for Pegasystems in Australia and New Zealand, with the company claiming many of the major players among its customer base, including CBA, NAB, ASB and BNZ.

Luke McCormack, Pegasystems VP and A/NZ managing director, says the company has already seen an upswing in business on the back of the Australian banking royal commission.

“A number of the big four banks have already started programs of work they refer to as remediation and our software is going to be used as part of that,” he says.

“The work that has resulted out of the banking royal commission has really driven a lot of focus on not just process efficiency, but process visibility and auditability, and also the topics around empathy. And empathy can mean some compliance or things like suitability, and making sure that the auditors and regulators can be confident about how a bank has arrived at a decision.”

That’s just one of the reasons McCormack is bullish about the company’s prospects in the local markets. He says the company is also seeing ‘massive’ growth in the public sector, which accounts for 30 percent of its Australian market.

“Citizen services is such a hot topic in both Australia and New Zealand. There is a big drive for digital engagement with citizens, and case management is pretty much at the heart of everything the government does – there are so many use cases and citizen journeys underpinned by case management. We see tremendous opportunity in public service for what we bring to market.”

In New Zealand, where the company opened its doors just two years ago, Pegasystems is betting on both the public sector and banking. It’s opened offices in both Wellington and Auckland and expects to double or triple its staff numbers (currently at 10) in the next year.

“The banking industry isn’t under the duress that the Australian banking industry is under but is certainly keeping a watchful eye on it and we want to be relevant to that market,” McCormack says. “But there are some wonderful big brands that have big consumer bases that we think we can be really relevant to as well,” he adds.

The company has also been working with New Zealand Police on a project to help them manage data associated with firearm licensing. While McCormack was unable to discuss the project in detail – the first stage has only just gone live – he says it is great to be involved with a project ‘where the social dividend is going to be pretty high’.

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