How Can Companies Leverage Chatbot For Financial Services?
Chatbots have transformed the customer experience in travel, finance, and other industries, but this is just the tip of the iceberg.
Juniper Research predicts that the use of chatbots in banks will make the cost savings go up to $7.3 billion by 2023.
Regardless of what you hear or feel about AI-powered chatbots, automated assistance can always be of great value. They are now a part of the IT department of 53% of organizations, support administrative activities in 23% of firms, and customer service in 20% of businesses. 41% of companies use them for sales while 17% include them in their marketing units.
In a survey, Juniper Research claims that the chatbot interaction in the banking and finance industry could go beyond 90% by 2022. But the extent to which it can be leveraged in the financial sector is still unclear.
The trend of Chatbot in the Finance Sector
Banks and insurance agencies can be seen using chatbot solutions on the front line as well as back-office systems since 2010. Erica, the Bank of America mobile banking app chatbot, COIN from JPMorgan Chase, Eno the 2nd chatbot from Capital One, and Amy from HSBC (Hong Kong) are some of the best examples you can relate to. They are driving innovation in the future of bank transactions.
Most financial institutions are not equipped with advanced AI technology. Hence, each of them should take time to check if they can gather insights and use advanced analytics to help the consumers in real-time.
The financial services sector has gone through radical change and faced stiff competition all these years. There is an urgency to improve IT capabilities, organize sales procedures, meet customer expectations, and grow in efficiency and cost savings.
Moreover, Fintech startups are flourishing fast worldwide. They are now leveraging chatbot technology out of preference as well as the need to fix the issue of lengthy conventional customer interaction. It has brought a great transformation in the way financial services are fetched and consumed before.
Chatbot Technology – Game-changing & Practical
With an increased number of new customers visiting financial sites daily, a small pop-up window has become a common thing on screen these days. They appear immediately to greet visitors warmly and ask them for queries. These pop-ups initiate a conversation with AI-powered chatbots rather than humans, bringing a change in how financial services are distributed. Thus, a faster connection can be established with customers on mobile devices or other popular channels including FB Messenger, Telegram, etc.
New-age financial organizations want to rise above the conventional standard by adapting to Chatbot technology. They are keen to deliver personalized customer experiences on time and via the popular channel. Following the chat feature in banking, bots have been serving as customer contact points that are very quick to answer all their standard queries.
Bot Market Phenomenon – A Positive Sign
A quick look at global market conditions proves that chatbots are getting popular at an exponential rate. All these predictions will add to your confidence that bots are here to stay for longer than expected.
- It is believed by 67% of industry experts that chatbots will exceed mobile applications in the coming 5 years time.
- There is a prediction that businesses will be able to save around $8 billion annually with bots by 2022
- Most interesting of all is that by 2022, normal people will be interacting with bots more frequently than they talk to their friends.
Chatbot – A Smart & Intelligent Assistant
AI technology-based chatbots help create an interactive experience for customers in the financial services sector. They initiate conversations with users through text and over voice. Designed to support 24/7, detect fraud, assess risk, and many more—chatbots are quick, efficient, and less expensive than live human agents.
Small and medium financial providers now rely on intelligent automation and personal messaging to scale up the user experience. Bots can take up a customer’s question, pass it on effortlessly within no time to a human agent if required, and then attend to the customer back again. This careful approach enables banks and financial institutes to solve basic issues without wasting time and money on human conversation. This opens up the scope for bots to be more reactive and attend to more queries at the same time.
A recent study estimates that the use of chatbots and AI in banks will save as much as 862 MM hours (0.5 MM working years).
The financial services industry acknowledges the significance of automated conversations initiated through chatbots. However, 3 out of every 4 financial services companies accept that they are not ready to deploy AI technology in their operational activities.
Best Reasons for Using Chatbots
Consumers prefer using different (offline/online) channels and paths for banking that are complex to figure out. It becomes a challenge for financial organizations to provide them a custom-made experience at every step of their journey.
Financial companies will have to engage and retain their customers and stakeholders in the best way possible, and anywhere and at any time. When chatbots integrate with mobile apps, customer engagement is never an issue. They care to provide customers with quick replies and personalized conversations with the use of AI and NLP. Even though 19% of banking users are presently getting assisted by chatbots, 95% assume that they will talk to chatbots more in the future.
The best reasons for chatbot usage in the financial services sector are as follows:-
1. Cost-effective development & maintenance – Chatbot development companies offer affordable packages for development and maintenance. They involve less programming than individual banking apps, can be compatible with different channels, and are free from huge expenses of physical data storage.
2. Innovative & easy to use – Without downloading, chatbots can personalize user experience over time and again through NLP.
3. Interactive interface – Customer service chatbots bring the excitement of both live interaction and speed.
4. Financial recommendations & advice at fingertips – Advanced chatbots can not only track all financial data of customers but also analyze their spending habits to come up with accurate advice.
5. 24/7 support service – A 24/7 live chat feature attracts and engages tech-savvy customers, giving banks an edge all the time.
6. Automated feedback generation – Chatbots can be used to get customer feedback and help financial institutions move in the right direction to satisfy more and more customers.
The Future Landscape
Chatbots have limitations in dialogue delivery capability, language understanding, and more. They are far from understanding images and objects, let alone using analytical insight into customer data and providing advanced suggestions. Most of them are designed for limited activities and cannot handle one or more queries outside their operational domain.
There is scope for financial institutions to offer a distinguished experience by developing use-cases for interactive banking where intelligent insights work with contextual engagement strategies. It will boost customer loyalty without expensive human intervention.
Taking the discussion further, financial organizations can think of hiring a chatbot development company to leverage innovative AI technology that can add chatbots with more advanced features like:
- Photo identification to facilitate no-click transactions
- Bring on the concept of virtual reality to graphically show the effect of long-term deposits
- Make an immediate status update on cross-border transactions
- Integrate IoT devices with chatbots to automate voice conversation
The financial services sector has only started exploring the potential of Artificial Intelligence, machine learning, and chatbots. To make the most of all these advancements, it has to build on the ability to gather insights and deploy context-specific analytics to serve the consumer better and faster.
While chatbots are certainly not high on the to-do-list of a majority of financial institutions, the prospects of this innovative technology should not be overlooked either.
Customers now want their banks and financial agencies to provide a sense of assurance, faith, and immediate help. Chatbots developed with advanced capabilities can personalize their experience; level it up while cutting down the requirements of human agents.