© Royal Bank of Canada 2017

HowanAIPoweredConversationalInterfaceAlteredtheRelationshipWithOurCustomers

September19,2017

LucyVillaflores&KennethShiuRoyalBankofCanada

© Royal Bank of Canada 2017 2

CompanyProfile

Ø Largest bank in Canada

Ø 6th Largest retail bank by assets in North America

Ø +16 million clients and has 80,000 employees worldwide

Ø Corporate headquarters are located in Toronto, Ontario

Ø Founded in 1864 in Halifax, Nova Scotia

Ø Over 1,200 branches in Canada and a growing footprint in the U.S.

Ø Over 120 branches across seventeen countries in the Caribbean

© Royal Bank of Canada 2017 3

TheYearAhead

© Royal Bank of Canada 2017 4

AdviceCentreHighlights

55 million self-serve IVR transaction per year

Supporting 13,500 Agent Seats

Expanded 600 home based advisors

20+ terabytes of structured and unstructured data

5.6 million proactive contacts per year

#1 JD Power, Ipsos & Dalbar

24x7x365 Customer Support

100 Million Incoming Calls Per year

MissionCriticalplatformservingmillionsofclientseachyear

© Royal Bank of Canada 2017 5

CustomerServiceOverview

AvailableChannelsandBusinessLinesServed

Call Center Chat Email Video

© Royal Bank of Canada 2017 6

WhyConversational?

Oldtechnologiesstoodbetweenusandahappycustomer

Ø Limitedself-serviceavailabilityandusage

Ø Lengthyaveragehandlingtimes

Technologyshouldbeinvisibletothecustomer!

NewConversationalStrategyObjective:SEAMLESS HUMAN-LIKE COMMUNICATION USING THE MOST HUMAN-FRIENDLY INTERFACE EVER INVENTED — V O I C E

DTMF IVR MENU TREE

Ø CustomersgetlostinIVR

Ø ManymisroutedcallsandAgent-to-Agenttransfers Ø Agentscosts5timesmorethanIVR

© Royal Bank of Canada 2017 7

GettingStartedwithNLU

RaninitialRFPforNLU

2014

Metnewvendorforfirsttime

JUN.15

CreatedCXLabDemo

SEPT.15 MAR.16

StartedCustomer-FacingPilotbuildforCards-IVR

AUG.16 JAN.17

GreenlightforFullNLU

Transformation

Our Journey to Conversational Virtual Assistance

FEB.2017

BusinessCaseApproved

RemainingLOB’s

NLUGoLive

OCT.17

Cards-IVRPilotGoLive

© Royal Bank of Canada 2017 8

ProvingtheTechnologywithaPilot

SuccessfulConversationalPilotforCreditCardServiceLineü Classifiescustomerrequestsinto+130differentintentcategoriesandsub-categoriesü Currentlydelivers10end-to-endConversationalSelf-ServicesforCardsIVR

TrackingResultswithBi-weeklySupervisedReports

BusinessKPI’sTechnicalKPI’s

TechnicalKPI’sØ AuthenticationinIVR

Ø Self-serviceAutomation&Containment

Ø Agent-to-AgentTransfers

Ø IVRTransferstoAdvisors

Ø SemanticAccuracy(CISR)

Ø TaskCompletionRate(TCR)

© Royal Bank of Canada 2017 9

NLUProjectOverview

Vendor hands over DEV Version 1 of Application

© Royal Bank of Canada 2017 10

ConversationalPerformanceandSuccessMetrics

“SemanticAccuracy”— ConceptIdentificationSuccessRate(CISR)CISRillustratestheextenttowhichthesystemsuccessfullyextractedthecorrectmeaningoutofthe

individualcallerutterances(in%)iscalculatedby:

=CorrectlyUnderstoodUtterances*100/TotalStepsbyCooperativeUsers

“SuccessfulCalls”— TaskCompletionRate(TCR)TCRrepresentsthepercentageofcallswhereDiaManT®successfullyservicedthecustomer’s

requestbycorrectlyroutingtothecorrectadvisororprovidingself-service(in%)iscalculatedby:

=SuccessfullyCompletedCalls*100/TotalCallsByCooperativeUsers

IndustryStandardNLUKPI’smeasuredbi-weeklywithsupervisedreports

© Royal Bank of Canada 2017 11

PilotResults

Within3monthsofPilotoperationthesystemreached

93%SemanticAccuracy& 86%TaskCompletionAUTHENTICATION SUCCESS

increased from44%→71.5%

WORD ERROR RATEdecreased from18%→5.6%

SEMANTIC ACCURACYincreased from80.6% →93.17%

ImprovementofmetricsCONTINUESaftertransitionfrompilottofullproductionoperation!

64.00%

66.00%

68.00%

70.00%

72.00%

74.00%

Aug-16 Oct-16 Nov-16 Jan-17 Mar-17 Apr-17 Jun-17 Aug-17

IVR Transfers

IVRTRANSFERSdecreasedfrom73%→65%

© Royal Bank of Canada 2017 12

BusinessBenefits

Double digit increase in successful completion of self-service

Increased Call Capacity (i.e. same amount of call volume with fewer ports required than old system)

Increased Client Satisfaction

Discovery of new convenient services to offer our clients

OperationalImprovements

© Royal Bank of Canada 2017 13

ClientLensonNewAIVirtualAssistant

Lessthan1%negativefeedback(sampleof1.45Millioncalls)50%ofcomplaintsrelatedtoissuesthatcanreadilybeimprovedwithfurthertuning,i.e.“didnotunderstandmyrequestcorrectly”

VoiceoftheCustomerFilters

© Royal Bank of Canada 2017 14

LessonsLearned

ü Openthetapaswideaspossiblefromthestart

ü KPIImprovement=ContinuousTrainingandTuning=Data

ü NLU(AI)testingmethodologyisnotthenormalwayQAengineersthink

ü Thereareabillionwayspeopleaskforthesamething– semantictuningiskey

ü AdheretostandardhumancommunicationprotocolwithVUIdesign

ü SelectingproperVoiceTalentisextremelyimportantforconversationalfeeling

© Royal Bank of Canada 2017 15

Being open and able to try new technologies, such as Chatbotswith the same platform , without need for new integrations.

Importance of Open Architecture

PLUG INS

Our customers want to have access to automated self-services using alternative channels of communication; SMS, Web Chat, Whatsapp, Facebook messenger and email. Our Dialogue manager needs to be Omni-channel if we are to continue improving.

Omni-Channel Strategy

MULTI CHANNEL

All customer interactions with new vendor NLU system produce big data that is providing us with a priceless repository of knowledge.

The Real Value of Data

INSIGHT

22

We discovered a lot about what our customers really wanted, and what new services need to be developed in the call center for the future.

SMS WEB CHAT WHATSAPP FACEBOOK

REAL TIMEVOICE BIOMETRICS

ANALYTICS

KeyDiscoveries

© Royal Bank of Canada 2017 16

ExtendingParleyApplicationtoDigitalChannels

DeployingOneApplicationforConversationalNLUSelf-ServiceonDigitalChannels

Channels

Media Voice Voice, Text, GUI Text, GUI Voice, Text Voice, Text, GUI

Phone Mobile App Online Whatsapp Facebook

Text

SMS

DesignandBuildVAApplicationOnce,andDeployonMultipleChannels

OptimizedInteractionswithVoice,Text,GUI&RichInteractiveMedia

© Royal Bank of Canada 2017

ThankYou

September2017

LucyVillaflores&KennethShiuRoyalBankofCanada

Questions?