My new Bank Advisor the Chatbot - How Conversational AI is transforming Banking

The world is digital. In the past, if you wanted to make a transfer, you had to visit your bank. Checking the account balance, transferring the rent or tracking incoming payments – online banking has been used for a long time for these kinds of daily transactions. Hence, the bank permanently accompanies customers in their everyday lives: via an app, on the smartphone, or with a laptop on the sofa. As a company, you can hardly get closer to a prospective customer or client, but this potential is often not yet sufficiently exploited. For more complex financial products, such as advice on a loan, banks hardly use digital communication channels. Information is provided via the homepage or blog articles. Still, in most cases, these do not help with the individual situation, and one has to make appointments with the personal bank advisor.

However, with the rise of digital technologies, banks need more innovative ways to serve their customers. Messaging, for example, has become extremely popular across all target groups and is shaping digital communication behaviour. Messaging channels should be strategically integrated into banks’ service offerings, as they are becoming the critical point of contact with users. Studies predict that in the financial sector alone, chatbots will automate up to 90% of customer interactions by 2022. Today’s customers expect uncomplicated and straightforward communication with the bank, which ideally leads to individual problem-solving in real-time, regardless of time and place. Sounds unrealistic? We show you how Conversational AI and chatbots in the financial industry are transforming communication between bank and customer.

The future is Conversational Banking

Conversational banking allows customers to engage directly with employees, chatbots or voice assistants via messenger and receive personalised advice. Thus, it aims at an increasing number of customers who prefer to carry out their transactions from their couch via social media or other messenger platforms such as WhatsApp, without having to enter a bank or make an inquiry by mail or telephone. Digital consulting is thus a consistent reaction to changing customer requirements, communication behaviour with the new standard of mobile devices and increasing competition in the financial sector.

Today, a well-thought-out multichannel strategy is needed to reach, acquire and serve customers in the best possible way. As a digital building block, conversational banking is becoming a critical factor for a bank’s omnichannel presence. Thanks to Conversational AI and chatbots, enormous automation potentials can be used in the financial sector and represent a clear competitive advantage in the digital transformation due to their scalability.

Conversational Banking e-bot7

Companies with higher customer satisfaction tend to generate higher returns. Change in total shareholder return (TRS) for companies with high, medium and low Net Promoter Scores (NPS). (McKinsey)

The bank visit – simple, digital, fast

Especially in the financial sector, there is a high proportion of customer questions that are common concerns. Where can I apply for a new PIN? How do I block my credit card? Has my salary been received yet? An AI-based chatbot or Conversational AI in customer service can automatically answer simple but time-consuming questions and help customers in an uncomplicated way without tying up the support team’s resources.

The bot can advise several customers simultaneously and is always available – around the clock, seven days a week. The word “waiting” can be eliminated from customers’ linguistic usage concerning the bank: There are no waiting lines on the phone, queues at the bank or days of waiting for a mail response. Thanks to intelligent chatbots, customers’ concerns can be clarified immediately from the comfort of their own homes. The desired account statement can be retrieved within seconds, and the lost credit card can be blocked in the middle of the night. The pandemic, in particular, has shown that customers appreciate the digital services offered by banks. They no longer have to go to the bank themselves to get advice on financial products. The bank comes to the customer digitally – no matter when or where the customer is and on which channel the communication should take place. Hence, Conversational AI can be integrated into various channels, ensuring that the advisory service is seamless across all devices and platforms.

The customer relationship is also sustainably improved, as interaction with the bank is easier for the user. Time-consuming travel times and the inhibition threshold of contacting the bank advisor in person are eliminated. The rapid provision of the desired information leads to a higher conversation rate. A study confirms the importance of customer satisfaction in finance. For example, retail banks with high customer satisfaction typically grow the number of deposits 84% faster compared to their peers with low customer satisfaction (CSAT).

Virtual financial advice – secure and GDPR-compliant

A bank holds a lot of personal data. Account transactions show what money is spent on, how much income is recorded and where it is invested. Nevertheless, online banking does not feel personal because contextual advice, adapted to the individual life situation, is missing. Thanks to the linking of financial and customer data, AI-powered chatbots can provide customers with individualised guidance and financial recommendations. If users want to receive more detailed information on their spending behaviour, the chatbot can provide an evaluation and analysis in real-time and give advice based on this. A short message via text or voice is sufficient to execute transfers without filling out long forms. Thus, the chatbot acts both as a digital assistant that completes tasks in the shortest possible time and as a personal advisor that supports decision-making. For questions about investments, for example, Conversational AI can analyse relevant data and daily news. In sales processes of securities, the customer is accompanied step-by-step by a chatbot and reduces the complexity of the process to such an extent that the user can carry out the transaction alone—self-service instead of queuing.

Thanks to Conversational AI, the users’ information is precisely tailored to their needs and creates concrete added value. The customer receives qualified advice at the right time and the right place via the right channel – regardless of the bank branches’ opening hours. Besides, thanks to the higher conversation and exchange rate with users, the bank receives more user data and can learn more about its customers. This allows banks to use artificial intelligence to analyse customers and inform them about individual offers via messenger bots and efficiently use cross-selling and upselling potentials.

Conversational Banking – the perfect combination of human and machine

Trust is at the heart of banking, and open communication plays a central role in this. Conversational AI and chatbots can be used in the customer’s communication process along the entire customer journey. The personal dialogue with the bank advisor should not be replaced but expanded and supported. Using Conversational AI, banks can provide their customers with faster, less complicated and more personalised support. The support team is thus noticeably relieved and can fully concentrate on more complex tasks. The bank advisor can, for example, send a special investment proposal to a selected group of customers via chat message on their smartphone. Questions can be clarified directly via the chat, and the trade confirmed. The transaction process is automated thanks to AI, and the communication process is fully documented for regulatory requirements.

Due to its scalability, Conversational AI enables banks to keep up with new and agile competitors and to offer customers an individual and innovative customer experience through personalised communication.