Combining Human Empathy and AI in Financial Services To Transform Complaint Handling

A customer spots an error on their bank statement. Money’s missing. Frustrated, they reach out. Within seconds, a virtual assistant replies summarising the issue, suggesting a likely cause and offering a resolution date.

It’s a quick and efficient response, with no human involved. But while this type of straightforward issue is perfect for artificial intelligence (AI) to handle, complaints often involve deeper emotions, complex circumstances and customers with specific needs.

This is the crux of AI in financial services. As technology gets smarter, faster and more embedded in day-to-day operations, institutions face a balancing act: harnessing AI's efficiency while preserving the personal touch that builds lasting customer trust.

Customers Want To Feel Heard and Valued

According to Huntswood’s Complaints Outlook, the most important drivers of customer trust are surprisingly human: empathy, transparency and feeling valued.

When a customer opens a complaint, they want to know someone is taking their issue seriously. They want clear, timely updates on their case. And they want a sincere apology, especially when it’s backed by meaningful action.

This emotional context is where AI can help or hurt.

For example, when a customer calls about a deceased family member's account, AI can help by quickly identifying the situation as sensitive and routing the enquiry to a specially trained agent.

But if that same AI tries to handle the conversation itself with generic responses, it risks turning a difficult moment into a devastating one.

People Know When They’re Being Handled, Not Helped

Complaints are trust moments. If AI responses feel cold or generic, they can reinforce the exact frustration that triggered the complaint in the first place. And once trust is gone, it’s hard to win back.

The biggest mistake financial services companies make is treating AI like a shield; something to deflect volume and reduce cost. Customers can tell when they’re being handled rather than helped. And the short-term savings from automation will be dwarfed by the long-term cost of lost customers and damaged reputation.

The best implementations use AI to support the humans behind the process. To give agents better tools, faster insights and more bandwidth to focus on what matters most: being present, listening actively and responding to customers with empathy.

The Growing Role of AI in Financial Services Complaint Handling

While customers’ emotional needs remain constant, the technology handling their complaints is rapidly evolving. Many financial institutions have moved beyond simple automation, using sophisticated AI capabilities to:

• Analyse complaint data at scale, identifying patterns and emerging risks to fix problems at the source

• Categorise and prioritise cases by urgency and complexity so the most serious cases are fast-tracked

• Answer routine queries freeing human agents to tackle more complex cases that need a personal touch

• Monitor data quality and ensure compliance, reducing costly human errors and oversights

Some institutions are even exploring fully automated resolution paths, using AI to offer refunds, apologies and close cases without any human input.

But with this progress comes new complexity. Regulators are paying close attention to transparency and fairness in AI-driven decision-making. And customers will only accept more automation if it comes with greater care, clarity and accountability.

AI Must Improve Complaints Management Without Losing Empathy

AI’s role in complaint handling is only going to grow. Technologies like natural language processing (NLP) and predictive analytics are already pushing the boundaries of good customer service.

NLP allows AI to understand sentiment and context, helping systems recognise when a customer is angry, anxious or simply wants a clear answer. AI-powered complaint management software that can tell when a simple "I'm sorry" isn't enough and a more substantial explanation is needed.

Meanwhile, predictive tools can flag when a customer might be at risk of leaving after a poor experience and trigger proactive outreach. Some systems can even suggest personalised retention offers based on the customer's history, the nature of their complaint and their predicted lifetime value.

Remember our customer with the missing money? In tomorrow's world, AI won't just spot and solve their problem. It might notice this is their third issue in two months and route them directly to a customer relationship manager who's already briefed on their history and ready with solutions; adding the human heart that technology alone can't provide.

After all, technology should help you deliver more human service, not less. Because when people feel heard and understood, even in moments of frustration, they stay. When they don’t, they leave.

Is your complaint handling striking the right balance between efficiency and empathy? Connect with our team to learn how our complaint management system, Aptean Respond, is helping financial services companies enhance customer relationships using AI.