Digital Trust integrates Risk and CX goals

Context

1. Financial Institutions (Regional banks, Community banks, FinTechs) face a tradeoff between risk (security) and client experience.

2. Both Risk and CX are expensive initiatives to build and maintain in a bank.

3. Question arises if Risk (security) and client experience are at odds or can they be aligned?

Insights:

1. Customers only experience "Trust". Both Risk and CX teams are essentially managing two different parts of the same Digital Trust that customers' experience.

2. Customer Journeys are dotted with several machine-human interactions.

3. Managing Digital Trust (DT) explicitly will help align both Risk and CX initiatives

4. AI with Digital Trust centricity is Trustworthy AI. Your customers, investors, vendors and regulators will all appreciate you for taking that step forward.

Actions

1. Fold Customer Protection and AI initiatives into a single Digital Trust framework

2. Digital Trust framework should integrate

   1. Governance-Risk-Compliance (GRC)

   2. CX Security

      1. Customer safety design principles

      2. Security first architecture

      3. Development that prioritizes security

3. Explicitly align Digital Trust milestones to regulatory, compliance, capital raise and vendor relationships goals.

4. Select a close knit of experts in security, design, algorithmic auditing to leverage within your playbook scope

ROI from Risk Management vs CX

Here is a taxonomy of the major customer protection initiatives that regulators expect banks to comply with. Try mapping this to the customer journey (in Fig 1).

1. AML initiatives

2. KYC checklists

3. CDD checklists

4. Transaction Monitoring

5. OFAC sanctions monitoring

6. FinCEN BOI documentation and reporting

7. SAR reporting

8. Model Risk Monitoring

9. GDPR initiatives

10. AI Risk monitoring

11. SEC Cybersec monitoring

12. PCI DSS (for payments)

This list is not exhaustive, but you get the idea. For enduring this donkey's burden of cataloging risks and monitoring them, the hope is ROI comes in the form of "loss prevention" in some form.

Typical DCX projects assume names such as Digital Transformation, Customer Centricity etc. Nevertheless, most of these projects have the following elements

1. Design

2. UI/UX

3. Customer Persona Research

4. Customer Engagement Models

ROI in these initiatives is usually a revenue/value metric like Customer Lifetime Value (CLV), retention, churn, account size etc.

We, at NeoRisk, have put together a simple diagnostic for you to get a quick look at your overall Trustworthy AI program. If its of interest, lets talk more about your product, challenges you are facing and how we can help.