Chatbots: Taking Customer Experience to the Next Level in Banking & Financial Sector

You might be getting greeted with a popup chat a lot lately for every website you visit with a sugarcoated message asking “How Can I Help?” which is nothing but a chatbot. Since banking and financial sectors are no different, banking/financial bots are joining the trend and raising the bar of customer service.

Technology Boom in the Banking & Financial Sector

It is pretty hard to imagine how difficult our life would have been; if the banking and the financial sector had not evolved with technology. The long queues, time constraint, money transactions all of it would have been nothing but a big headache if the banking or financial sector would have not yet started leveraging the power of mobile apps and other latest and innovative technologies.

Since both sectors - banking and finance have an extensive customer base; customer experience is of utmost importance to both that has improved a lot due to their mobile apps. But, apps do have limitations. Although they have eased authenticating and conducting transactions seamlessly, opening and closing of accounts and investments, loan processing, etc. there are some areas which a user ultimately has to access the website, or worse – phone the call centre, to complete specific processes.

Moreover, things keep on changing in both sectors and hence; if the app is not updated, banking queries and financial advice require human interaction which consumes a lot of precious working hours of humans in both sectors. Therefore, automation is becoming a necessity in customer service as an answer to which, banking bots or financial service chatbots are emerging, and we do need them.

Chatbots: The Intelligent Assistants

Chatbot technology is a smart replacement for human intervention in customer service. Also known as ‘conversational agents’ a chatbot is a software application that uses artificial intelligence & natural language processing to understand what a human wants to know, and guides them after investigating the context to their desired outcome.

The saga of chatbots began after Facebook in 2016 showed the world what is possible with chatbots through their Messenger app. Soon, Google joined the league with Google Assistant and since then, began the trend of a chatbot on a website, in applications, on social media, for customer support, and countless other examples.

Chatbots are rising to fame, and as per studies, they will soon outperform mobile apps in the next five years. The reasons they are becoming the need of the hour are their 24/7 availability, instant responses, adaptability, error-free efficiency, simple interface, the capability to remember customer preferences, speed, and problem-solving ability. In fact, a Juniper study found that the use of chatbots can save banks up to $7.3 billion worldwide by 2023 i.e a time saving of 862 million hours, or almost half a million years of work.

Why Chatbots Are The Game-changers?

You will be surprised to know that building and implementing a chatbot is a lot easier and cheaper than developing and maintaining a separate banking app. That doesn’t mean an app is of no importance as both are two different things. But yes, chatbots are game-changers as they are not just attending the queries of humans but are also studying them to serve them better in the future. Thus, delivering a personalized experience to customers without any human effort is now possible with the birth of chatbots.

How Chatbots Are Revolutionizing the Banking & Financial Sector

Since banks and finance industry are the sectors with a large customer base, providing personalized, helpful guidance to prospects and clients at scale is a huge challenge, and hence chatbots can be a great addition.

Banking bots or chatbots in financial services are emerging as the new face of customer service as it is freeing up humans from attending petty tasks of customers like checking their account balances, transferring money, learning about interest rates, changing their billing addresses, and more.

A recent Accenture report mentioned that the banks can achieve a boost in their revenue by an average of 34 per cent and their employment by 14 per cent by 2022 if they start investing in AI and human-machine collaboration.

There are even types of chatbots you can opt for like:

Now, let’s see how chatbots can contribute to financial services and banking.

Use Cases of Chatbots in Financial Services/Banking

1. Answering Frequently Asked Questions

Banking and financial queries are never-ending. People always have one or the other query popping up answering which; consumes half of the working hours of humans. Also, the majority of them are the FAQs such as how to add a beneficiary, how do I update the mobile number, how can I upload KYC documents? so on. Such repeated and tiny queries can be handled by chatbots efficiently thereby saving ample time of employees for other important jobs.

2. Providing Financial Advice and Information

Many users are hesitant in discussing their financial situations with customer service agents there; finance chatbots can turn out to be great advisors. After examining the accounts, credits, spending habits, investments etc. finance chatbots can suggest from monthly budget to savings plan for customers to help keep their finances under control. Chatbots can also proactively deliver insights to the customer based on her/his transactional history and digital profile as well as provide them with timely information related to the market, tips and tricks about financial planning and money-saving, inform about new offers in credit card, help locate nearest ATM and other such information to take action accordingly.

3. Preventing Fraud

Of course, security becomes the biggest concern when it comes to financing and now with online banking, the fear of fraudsters and cybercrime have doubled up. It is quite natural to doubt chatbots regarding the safety of finances but, in reality, AI-powered chatbots in banking and financial services are programmed with high security and capabilities to identify signs of fraudulent or unexpected activity on an account. The banking bots can even raise alerts to the account holder and the bank when any such suspicious activity arises for them to follow up and take action immediately.

4. Lead Generation, Qualification and Engagement

> Customer onboarding is the prime focus of every business sector, and the same is the case for the banking and finance sectors. Therefore, apart from helping customers carry out their banking needs and fulfilling their financial requirements, banking chatbots are perfect for converting a potential customer into a real one.

chatbots on a banking website are good at generating leads, and there are various methods to do so like by incorporating a chatbot window on the bank's website and luring a potential customer visiting the site in search of information by pitching the latest offers on the bank’s financial products, linking finance bots to Facebook ads, or by setting up a feature to acquire bot users from comments on Facebook page posts.

Banking chatbots are also eligible for the lead qualification that is the process of classification of leads by the degree of its willingness and readiness to associate with the particular bank. Last but not least; once the lead converts to customers, finance chatbots are also capable of keeping customers engaged via surveys, gathering feedback, polls, etc.

5. Promotion and Cross-selling

> Due to high competition, most of the banks and finance companies are now taking advantage of chatbots in grabbing the attention of customers by enlightening them about their financial products and services via them.

AI chatbots are being employed to gather customer data by conversing with them and after studying the customer interaction; the chatbots are proactively suggesting offers and services tailored to each user.