Irina Kolesnikova
February 10th, 2022
Juniper Research predicts the total number of people using digital will reach 3.6 billion by the year 2024. But for a traditional financial institution, it could be challenging to compete with fintech.
Automated conversational banking could be the pain-reliever. Here is a simple example: based on our experience, every customer service call contact costs about 3.2 EUR (in Estonia), but a huge part of this (50% and more) could be automated either with conversational IVR or chatbots.
In this article, you will learn about:
Conversational banking is a digital banking technology recreating a personalization level of human connection on digital channels.
It takes on many forms: text messages, visual and voice communication tools and ways to communicate, such as mobile apps, websites, messaging apps, etc. The best part of it—you can automate repetitive inquiries using artificial intelligence (AI) that enables customers to interact with banks through voice-activated or text-based chat interfaces.
AI software allows customers to engage with banking systems for routine financial services and transactions through convenient smartphones, tablets, PCs, smartwatches, television remotes, and other digital technologies.
There are many ways in which conversational banking AI solutions can be useful for customers and their financial institutions. Some of the most common applications in the banking industry include:
Conversational AI for banking further personalizes the consumer experience by providing voice recognition capabilities.
Customers can give verbal commands to the software and have their responses converted into the input for AI—which provides them with an answer in just seconds. It is also particularly useful for visually impaired or hard of hearing clients who cannot access other digital customer care systems.
Pretty well self-explained, but to emphasize—this is what makes customers happy!
This is especially beneficial compared with the average waiting time of 2.5 minutes until clients are connected to the customer service representative. As people are used to getting instant responses similarly with googling something, waiting might create a frustrating experience.
It is important for customers to reach a financial institution with a query—this is the question of their money!
The good news is frequent and common questions and financial services can be automated and provided around the clock. With AI and machine learning, it will only get better and better through time.
It is always easier to find words in your native language, isn’t it?
It would be great to talk to customer service staff speaking several languages, but it doesn’t happen often—probably because this kind of employee is a rare find (and more expensive for banks, obviously).
With conversational AI technology, customers can seamlessly interact with banks through text or voice commands without having to remember an avalanche of complex usernames, pin codes, or passwords.
Still, some actions for the identity authentication process are needed: at the moment, clients could use biometrics on their devices, Smart-ID, or onetime passwords they received via SMS.
A client just speaks or types the request and receives an immediate answer—as simple as this.
The more attractive the conversation is, the more times the customer is involved—building loyalty and openness to new opportunities (aka your commercial offers).
Conversational AI also helps banks reduce their operational costs. Multiple conversational banking use cases identify significant cost savings derived from a reduced need for extensive training of human customer care representatives for capabilities in handling more complex transactions.
For instance, TitanCS has automated about 40% of all the incoming contacts, and 60% of written ones.
By providing a more personalized user experience, conversational banking solutions also help organizations enhance a customer journey and thereby loyalty and satisfaction levels.
In a study conducted by Juniper Research, approximately 50% of customers would likely switch their bank if they felt that the institution did not care about them as individuals.
Conversational banking leverages technology that helps to provide flexible and personalized service as a more human-like interaction tailored to the customer’s specific needs and behaviors.
You can quickly provide information on specific products and financial services—or more detailed explanations about specific banking procedures. Text and voice communications are also easily personalized based on various factors, including location, time of day, and the digital device.
Conversational banking solutions must also support customers who still prefer engaging with the bank’s more traditional websites and mobile apps.
Therefore, the AI-enhanced interface should be capable of working seamlessly alongside these other types of human and digital channels—rather than completely replacing them. After all, banks rarely want to alienate their long-term customers by forcing them to learn a new and sometimes intimidating technology.
Calls automated with conversational AI can work here: looking like good-old-fashioned phone conversations, it brings faster answers and a better experience (because it is always polite and not influenced by the mood or bad days).
Another benefit of conversational AI for banking is that it dramatically reduces the risk of data leaks.
In recent years, social engineering attacks are rising. People could lose their money because of too emotional human support: a criminal tells a pitiful story and asks for access to another person’s bank account.
Conversational AI systems are infinitely more secure because they no longer require customers to enter personal information into data fields (like login credentials, addresses, and credit card numbers)—and will never fall for a sob story.
One of the great advantages of conversational banking solutions is that organizations of all sizes will experience tremendous advantages. Even small banks will benefit from this technology—especially if they want to beat their local competition!
In contrast, the development of mobile banking apps can be prohibitively expensive for smaller banks. Meanwhile, conversational AI does not require additional IT infrastructures, such as servers and databases. So, smaller financial institutions can implement these AI solutions for a relatively low cost.
This is possible thanks to Big Data analytics, which can help the bank gain insights into customers’ decision-making processes and preferences.
Financial institutions can provide relevant promotional offers and recommendations through conversational AI solutions in real-time without human intervention by a customer service representative.
Conversational AI banking allows customers to resolve simple questions or requests in real-time. The customer interacts with the software using natural language—which is then translated into a format that the bank’s internal systems can recognize.
3 primary areas banks are exploring conversational AI chatbots and IVR:
The trend is clear: to compete with fintech, the legacy banking industry needs to implement Conversational Banking solutions in successful customer service to provide clients with a better experience. Using AI-powered Conversational IVR and chatbot reduces costs, radically boosts client satisfaction and loyalty, and eliminates human mistakes caused by an emotional state of mind. Setting up the process could be challenging, so it is crucial to choose the right technology partner.
