Today, every enterprise is trying to integrate artificial intelligence into its business and operations strategy and banks are no exception. Rising customer expectations and a focus on personalized, digital experiences are driving banks to conceptualize, test, and deploy new consumer tools. Among these is the not-so-humble chatbot, which is fueling a new era of conversational banking.
What is conversational banking?
In essence, conversational banking is a concept where financial matters are handled through voice or text interfaces. Instead of hitting buttons on a banking app graphical user interface (GUI), you speak or send text messages to an AI program that executes functions for you. Created specifically to facilitate this mode of financial management, banking chatbots man the frontlines of the conversational banking world.
Banking chatbots can help customers accomplish multiple tasks - from simple routine jobs like checking account balance and paying credit card bills to more complex ones like opening a bank account, delivering real-time financial analytics and processing loan requests. In more ways than one, chatbots today are quickly taking over the teller or the relationship manager’s place as a customer’s first and primary interaction point with a bank. And while we haven’t seen a retirement planning bot yet, with the rapid growth of AI technologies, it’s only a matter of time.
For now, let’s take a deeper look at how chatbots are positively impacting the banking industry.
1. Lower operational costs
Compared to human staffers, chatbots are less expensive. There is a one-time development cost of a chatbot that must be updated with information over a short time period before it can handle thousands of customers over multiple channels. The cost to train and employ humans for the same task is much higher. Moreover, building a chatbot that operates on multiple customer touchpoints can be even cheaper than building a custom banking app, especially when operating on a cloud-based framework.
2. More reach than an app
Unlike an app, a chatbot can operate on channels that your customers already visit, making it easier to deliver support, nurture leads and create omnichannel customer experiences. From social media platforms like LinkedIn and Facebook messenger to voice assistants like Siri, Bixby, Alexa and Google Assistant, chatbots allow you to meet your customers on their terms.
3. A speedy, intuitive interface
A mobile banking app requires download and installation, and even then is usually navigated using buttons and menus. A chatbot, however, responds directly to queries in a conversational mode. By mimicking human patterns of interaction and learning from each engagement, chatbots enable us to seamlessly communicate with enterprises and quickly execute financial tasks in a manner that is personalized and intuitive. Speed is another factor. Compare the boredom of being on hold with a customer service executive to the near-instantaneous answers you’d receive from a chatbot and it should be easy to see why the chatbot is becoming increasingly popular.
4. Analytics and advice
Many of the more complex AI platforms in banking are capable of analyzing all your data and delivering insights that can improve your financial management. From purchase patterns, spending behavior, and credit information to budget planning and cost savings, an AI chatbot is equipped to be a personal money manager in ways that a human can hardly match.
5. Lead nurturing and sales
The way goods and services are being consumed is changing. Customers today are more informed than ever before, making selling strategies redundant in many ways. The initiative is now on the customer’s side, and active sales techniques are being replaced by sales and marketing consulting. Across the banking industry, chatbots are slowly eclipsing pre-sales personnel as the quickest, surest way to acquire warm leads. This is because unlike a human salesperson, a chatbot can access multiple customer touchpoints on the omnichannel buyer journey. Moreover, chatbots are armed with a repository of customer insights and can process incoming data at lightning speeds. This makes them uniquely suited to the task of shepherding large numbers of potential customers through the sales funnel.
6. Anytime customer support
The ‘always-on’ enterprise is no longer a new idea, and neither is the digital customer. But having a global customer support operations outfit to deal with millions of queries every week is both resource-intensive and poorly scalable. Chatbots offer a smarter solution to this problem. By engaging with customers, solving their problems and escalating their more complex demands, chatbots offer a real-time filtering system that can massively reduce the workload on your customer service teams. In fact, AI chatbots can currently resolve up to 80% of customer queries. As chatbots learn to handle more complex queries, they enable you to reduce the human footprint of your customer support division, saving you time and resources.
Other trends in banking and AI
Aside from all of the above, AI chatbots are being deployed across financial institutions in new and innovative ways. For example, at JPMorgan Chase an AI platform is being used to quickly scan and process contracts and documentation, saving the firm over 360,000 man-hours to date. Another instance involves the Swedish SEB Group, where a chatbot named Amelia is helping employees solve internal problems and offering rapid, sustained tech support.
Banking chatbots can also help banks connect with newer, more tech-savvy audiences among millennials and Gen-Z, by integrating banking into social networks and instant messaging platforms. In fact, over 80% of financial institutions believe that chatbots will help them better engage with millennials, in particular.
The future of banking and that of many other industries is entwined with the rise of conversational AI. To understand this, you only have to consider developments like the continued integration of AI and voice-recognition platforms and facial recognition to improve security. Some other developments include AI-powered virtual reality experiences that can drive customer behavior, and the vast, untapped potential of IoT and connected devices to enable global banking service delivery.
Soon, we can fully expect that AI platforms will be able to process more information about individual lives, preferences, financial situation and spending tendencies. This will help generate wholly customized banking experiences. The dream of truly personalized banking services on a mass scale is now a reality because of Conversational AI.
Although many of these ideas are still incubating, it’s clear that the current pace of technology will make many of them a reality within our lifetimes. Financial institutions who want to grow their future customer bases will have to adapt, adopt, and innovate conversational AI platforms to unlock new service models and paradigms.