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Top 10 Ways AI Chatbots are Transforming the Future of the Banking Industry


Since the inception of Artificial Intelligence, humans have been curious about its usage as a digital medium to every problem at hand and the banking sector is no different. According to Gartner, 85% of customers would interact without any human intervention by 2020.

A chatbot is a computer program based on Artificial Intelligence, to provide solutions or responses to requests or questions by the customers. But, unlike ‘Live Chat’, chatbots are fully automated. Chatbots can be programmed back and forth to streamline and optimize banking services.

The paradigm of banking services has been revolutionized by technologies like AI and Machine Learning, due to the faith of average customers to let the computers, decide for them, their important financial decisions. According to the Accenture survey, 71% of consumers are open to an ides of interaction with chatbots.

Many giant fin-tech firms are also at play with their digital payment platforms and they too deploy chatbots for effective sales and service through their online payment platforms. Alibaba group’s Alipay has a large user base of 450 million users, emerging as Asian leaders in the digital payments market.

Similarly, we saw other, E-commerce giants like Amazon and Google entering the market and with smartphone manufacturers like Samsung and Xioami tapping the market, the banking industry needs to look beyond conventional systems and adopt this technology. So, here are the top 10 ways chatbots can transform the banking industry.

According to a report by business insider, digital and mobile-first features are dominating the banking industry. Customers are already taking their financial control in their own hands. In 2017, retail banks spent about $20.2 billion on digital transformation at a compound annual growth rate (CAGR) of 22.5% by 2020.

Customers are frustrated with current banking relationships and top 10 United States bank is on the verge of losing 11% customers, rendering a loss of $344 billion worth of deposits and $16 billion of revenue.

Like any business entity, banks are no different, they too need sales of banking services and products to sustain. Chatbots can be programmed with a list of questions that can target customer’s needs and pitch various products. With chatbots, banks can identify potential customers, segregate qualified customers and deliver quality leads to the sales team to work upon.

Chatbots can be programmed to learn customer behavior patterns, life events and important moments, to offer personalized offers and products tailor-made for the customer need at any respective time in life. This can potentially increase sales of financial products to generate revenues for banking entities.

With the help of technologies like machine learning and Natural Language program(NLP), chatbots can be designed to provide 24/7/365 serving chatbots that offer various banking services to customers. Banks can hire developers with knowledge of machine learning and NLP logic to design such chatbots. Chatbots can be highly responsive and quick than human agents.

According to recent research, a call to a customer service advisor for a normal customer query would take about 11 hours to resolution, which is 3 times more than the promised time of 4 hours. Some of the escalated cases take about 74 hours and way beyond.

Chatbot has an average response time of 24 minutes. This is the type of quick services chatbots provide in delivering banking services. Less than 49% of customer queries are resolved in the first interaction itself, the main reason for this is that 68% of customer service advisors struggle to solve their queries first hand.

On average, the customer service advisor spends only 25% of the time to gather information regarding the actual query and 33% time on understanding the nature of the query. Whereas, Chatbots, use advanced AI technology to analyze a query and provide an instant response with maximum accuracy.

Chatbots can provide money management solutions to customers at any time and execute financial decisions, once permitted by customers. Chatbots are connected to a huge network of information across the globe, with access to market status, financial liquidity levels, and market sentiment. At the same time, Chatbots can tap into a customer’s account, identify potential financial decisions and investment advice that can manage customer’s finances.

Experts say today’s simple questionnaire programs will soon evolve into sophisticated conversational agents capable of helping customers keep track of their money with balance notifications, bill reminders, suggestions on how to save for a rainy day, and more.

Today Chatbots can prove to be a life-saver for customers like Millennials by providing a much simpler way of managing their subscriptions, optimizing their day-to-day spending and finding better financial products. A banking bot can also explain complex finance terminology in a simpler language, for a better understanding of customers.

Personal finance bot, Cleo is leveraging machine learning to learn about a customer’s spending patterns from the data the customer has handed over. It helps customers decide on accounts that need to be managed by Cleo.

Cleo helps you budget, and set you up with a Cleo wallet, helping you every week to put aside your spare change. This financial bot is connected through facebook messenger for every interaction.

Many banks are currently working on projects to tap into social platforms like, Facebook, Whatsapp or other platforms to stay in touch with their customers, as social platforms are an increasingly popular medium for customers and thus, it’s easier for banks to have a healthy relationship with their consumers.

DBS banks already provide chat-happy banking app in Whatsapp and Wechat. Many other banks like Barclays, JP Morgan, etc. have already begun to integrate such social platforms with their existing digital framework.

Customer feedback is the most important factor for any business and the same applies to the bank industry, Chatbots can provide valuable feedback data through various online surveys and questionnaires. Thus, banks can get all the feedback data they need without any hassle of having physical surveys.

Chatbots can encourage customers to open new accounts for respective banks, with their explanatory powers, they can persuade customers with banking facilities and ease of banking services through an automated system as the bot itself.

One of the most promising financial products of the banking industry is the Insurance sector, as it provides capital for banks to build assets that keep these financial institutions afloat amidst economic adversaries. Often banks rely on physical human agents for insurance sales, who convince the customers one on one regarding the benefits of a good insurance plan. This can drastically change with banking AI Chatbots, who can utilize important, financial and personal customer history to offer insurance plans best suited for the customer and offer recommendations.

Chatbots can help customers, find the nearest ATM and Branches to reach out for important transactions or assistance. Though we could expect, most of the banking services going digital in the coming years, but yet we can expect some important banking operations to have remained physical and bots can help you find the branch you can visit in close areas.

Bots can easily handle a case or query to live agents after the initial questionnaire or after an initial sales pitch. This helps to groom an initial lead for a sales pitch. Such an ecosystem can ensure growth for banking institutions along with maintaining human integrity and employments. This is a better approach then totally, removing human agents.

Millennials today, check the bank’s mobile banking capabilities and then choose a bank for their transactions or accounts. This shows the dire need of banks to switch over to technologies like AI and machine learning. This is where a helping, happy-going, gentle spoken AI chatbot can do wonders for banks.

Imagine, customer-friendly bots that can learn, each customer’s life, finances, capabilities, assets and offer recommendations that can suit the customer and this is tailor-made for each customer. It is like banks offering special services to each customer.

Such services, can attract new customers to the banking industry and fight the demons of the Fintech industry shadowing the banking industry. Fintech industry thrives on the single principle of quick service. They provide seamless, easy and fast transactions and services.

The same can be achieved by using AI and Machine learning algorithms by the banking industry and by integrating an intelligent assistant like Chatbot, banks can ensure, customer support and service at any time or day of the year.

Banks can analyze the current voice assistant smart speakers for example. As VUI based smart speakers are now used by customers to find information regarding almost everything. It can be observed that smart speakers like, Alexa, Siri, Google Home are quite popular among customers. It shows people’s willingness to accept an AI-based technology to assist them in any decision they make and even financial decisions for that matter.

So, AI chatbot is the next step that the banking industry needs to take for survival in the digital jungle, where technology dictates all the terms of survival!

Author Bio :

Manoj Rupareliya is a Marketing Manager at AppEmporio. who has been writing for various blogs. He has previously covered an extensive range of topics in his posts, including Business, Technology, Finance, Make Money, Cryptocurrency, and Start-ups.

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