Chatbots in Banking Sector
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How Chatbots In Banking Industry Are Transforming Customer Experience

23 Apr 2021

Customer experience has always been the top priority for every industry. And, the world of banking is no different. Today, financial institutions realize the power of conversational bots to drive productivity, automate and streamline operations. This, in turn, creates a powerful impact on customer satisfaction.

While some of the earliest bots were simply response platforms, today’s AI-powered chatbots in banking can perform much more. These bots are re-writing the rules of engagement and creating a competitive edge for the industry. As the users rely even more on their mobile devices, they also look for simplified ways of banking. The bots of today help to do just that. Through their choice of device, they help customers transfer money, check account balance, request check/card and more.

Currently, chatbots in the banking sector are transforming the customer experience. They aim to understand, replicate human behavior and respond to deliver similar experiences. Let’s take a look at the various ways in which banks are now re-imagining customer journeys that enhance engagement.

Contents:

  • What is a Banking Chatbot?
  • Why are Banking Chatbots a Must Today?
  • Business Benefits of Chatbots in Banking
  • Key Features of a Banking Bot
  • Potential Use Cases of Chatbots in Banking
  • Technologies Used by Banking Chatbots

What is a Banking Chatbot?

It is an Artificial Intelligence-enabled application that recognizes and executes different bank banking transactions of customers. They help automate the customer and bank relationship. The chatbots can do much more than just responding to customer queries. If customized in a particular way, they can reply to questions with much more ease.

Why are Banking Chatbots a Must Today?

Well before the pandemic, banks were already interacting with digitally connected customers. The ones who wanted to manage their finances in an even more convenient and interactive way. The outbreak situation of 2020 only accelerated this trend, especially since most banks had shut the physical outlets or operated at minimal capacity.

Here are some statistics to help you understand why banking chatbots are important.

  • Research by Juniper suggests that 90% of bank interactions will be automated with the help of a chatbot. It also emphasizes how banks & financial institutions can dramatically cut costs.
  • Since it’s established that chatbots are a cost-effective solution, Accenture research suggests that 57% of global companies agree that chatbots have large ROI.

Business Benefits of Chatbots in Banking

  • Quick Communication
    Customers always want their concerns addressed quickly. That’s why chatbots are trained to keep the customer engaged and solve their queries. With traditional banking, users would get frustrated if they had to wait in queue or on a call just to get their query addressed. Chatbots, on the other hand, understand the urgency of a problem and help escalate any issue without human intervention.
  • Round-the-Clock Support
    Some customers can shuffle between professional and personal commitments. However, others simply cannot. Chatbots must be able to provide 24X7 support that caters to the needs of customers at all times. In a scenario, even when a call to the bank does not go through, a chatbot can help answer queries.
  • Convenient and Seamless Communication
    The average customer is still unsure about money management. They could find it time-consuming, confusing and difficult. The chatbot has the power to put their worries to rest. Millennials form a significant part of digital banking. The convenience and ease of communication are of supreme importance to these digital natives. They find it much easier to adapt to newer technologies and even trust that it would make their lives easier.
  • Personalized Banking Experience
    It is no secret that customers expect the best possible experiences at every turn. But personalization is not just about marketing and selling. It is also about keeping your customers informed, sending them updates, providing them with handy resources. Chatbots are as good as a friend whom you can trust with any information. So, the moment the chatbot has access to all customer details, it initiates a further conversation. The chatbot also verifies details like login/password, phone number, email & mailing address and more. This way, they can greet users by name & accordingly they can set up language preferences for a more engaging conversation.

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Key Features of a Banking Bot

An ideal virtual assistant should include the following features:

  • Conversational
    Your bot needs to behave like a financial advisor and not a robot. It is all about humanizing the technology in a way that ensures that customers are not put off by the service. Thus, introducing more conversational language in every interaction will help the customer feel connected.
  • Transactional
    A chatbot is not worth the investment if it cannot manage important operations. The bot needs to be taught to respond to queries like, “I would like to open a new bank account” or “Please help me transfer xxx to John” or “Help me create an investment fund”. A virtual assistant must help with facilitating these operations and at the same time, coordinating with back-end operations. These integrations are complex and where you require a conversational AI solution that integrates internal and external systems.
  • Reliable
    At the end of the day, money is a sensitive issue. That’s why the bot needs to represent two important characteristics – reliability and security. Errors in interpreting messages or inaccurate transactions can lead to bigger issues like losing the customer.
  • Multi-channel
    One of the biggest advantages of having a chatbot is its deployment across channels. Today, customers use different devices for different purposes. They may use their phone for making calls and be present on social media. But they may use a tablet or an iPad for banking and other services. Besides, some customers may be comfortable with banking on an app, while others would prefer a phone call with a virtual assistant. But some customers would enjoy using voice assistants like Google Home or Amazon’s Alexa.
  • Security
    Data privacy and security are the most critical aspect of banking. You must ensure that the data retrieved from customers can be accessed only by your bank. Also, you must integrate your chatbot solution with a centralized authentication system.

Chatbot Banking Use Cases

To help you understand how a chatbot performs all these actions and more, let us take a look at some of the illustrative scenarios of such implementations.

1. Transfer & Receive Money
As mentioned earlier, chatbots are a trustworthy virtual assistant that helps with money management. At any time, a customer can transfer funds, cancel transactions and even receive payments. It also integrates other functions like money recharge opportunities to further pay off mobile & credit cards.

 

2. Review & Customize Accounts
Beyond transactions and payments, users can even explore and customize other aspects of their accounts. They can view transfer limits, card bonus points and recurring payments. Users can also change & update the account with personal details easily.

Chatbot for Transferring and Receiving Payments
Location-Based Chatbots

3. Respond to FAQs
These bots are also trained to respond to any other queries that customers may have. These could be questions that people would ask customer representative, bank staff, or search on Google. Some of the questions could include, “What’s the interest rate for my savings account?” or “How do I apply for a credit card?” or “How do I apply for a loan?”

 

4. Provide Location-Based Answers
The questions you ask a chatbot can vary from one location to another. The answers are very specific to your area and can guide you to the nearest bank if necessary. The chatbot can answer questions like, “Where is the nearest ATM/bank?” or “What are the additional transaction fees for this card?” Once they have your location via GPS, chatbots can respond more accurately to each question.

5. Push Notifications
Chatbots are programmed to send important reminders to users. These could be for bill payment, loan application processing, or necessary documentation. The notifications serve as important cues that make the customer aware of things they may have forgotten about.

 

6. Assistance During Suspicious Transactions
One of the biggest concerns that most customers have is the security of their accounts. However, chatbots immediately respond to customer concerns about suspicious transactions. The bot will provide immediate assistance and redirect them to a live agent as quickly as possible.

Chatbot help assistance during suspicious transactions or fraud

Technologies Used by Banking Chatbots

Chatbot development utilizes a whole range of technologies to maintain a balance between performance and functionality.

And, several programming languages can be used for developing chatbots for mobile or web apps. It includes PHP, Java, Ruby, Closure, and some others. However, Python tends to be used most for this type of development for the advantages it offers with an extensive set of libraries and frameworks. More importantly, it also has several useful libraries for machine learning to combine with language processing.

Redefining the Banking Experience with Bots

In an already competitive financial landscape, banks must fuel their strategy with innovation by bringing conversational ai in banking. However, innovation can come across as a challenge for banks that lack technological resources. In such cases, most banks turn to a custom software development company to help develop a solution that transforms the banking experience. These partnerships not only help reap big rewards but also empower you to develop custom solutions at a competitive cost. Banks, financial advisories and credit unions that compete with larger institutions often turn to a partner who helps design, develop & deploy solutions with all the right resources & technologies.

Why Choose Rishabh Software?

For banking enterprises, the bots offer a way to create a more personalized and engaging customer experience. We understand the diverse business needs to develop custom chatbots. It would be best to have a chatbot development partner, like Rishabh Software who can offer required skillsets, a superior technical interface with a seamless process management practice, and a mature infrastructure for optimum results.

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