Banking chatbots help customers conduct banking transactions simply by voice or text. They are helpful for the bank because they can reduce operating costs and improve customer satisfaction by streamlining interactions.
However, this is a new technology, and banks should deploy well-tested solutions to ensure chatbot glitches do not damage their reputation.
In this article, we’ll explain what banking chatbots are, what benefits they offer to banks and customers, and how you can create a functional banking chatbot.
What is a banking chatbot?
Thanks to developments in artificial intelligence and increasing mobile usage, banking chatbots are becoming more and more popular.
A banking chatbot is an AI application that perceives and executes customers’ banking transactions. In banking, chatbots offer the opportunity to automate the relationship between the consumer and the bank. After ATMs, phone banking, online banking, and mobile banking, banking has entered a new era of Conversational Banking in recent years. Conversational financial includes both interactive voice response (IVR) systems and chatbots.
Banking chatbots are also referred to as conversational banking, virtual financial assistants, or virtual banking assistants.
Why are banking chatbots so important now?
The automation enabled by chatbots will be beneficial to banks:
A study by Juniper predicts that chatbots will automate 90% of interactions in banks by 2022. The study also suggests that “dramatic cost savings” can be achieved in the banking sector.
Chatbots are cost-effective: The Accenture study shows that 57% of companies believe chatbots can deliver a high return on investment with minimal effort.
Customers are already familiar with messaging, which is a large part of their mobile usage:
- Demand for mobile banking is growing across all age groups.
- Round-the-clock chatbots integrated with mobile apps can provide users with instant solutions to urgent issues they can’t resolve through the app
- Customers like messaging. Almost all mobile users recognize messaging apps such as Whatsapp, Telegram, and Slack. Written and Millennials mainly prefer informal communication via these apps. Banks are also testing the use of these popular messaging platforms for customer service.
What are the benefits of chatbots for banks?
Ease of use: Chatbots can be easily integrated into many platforms such as conversational platforms, mobile apps, or websites. Thus, can carry out banking transactions by communicating with chatbots on any platform, and these bots are becoming more accessible and intelligent.
Faster customer support: Contacting bank customer representatives can sometimes be a process that requires a lot of waiting time. Chatbots can help users without waiting for an available customer service representative.
Higher user engagement: Banks constantly create new campaigns and personalized financial plans. Chatbots can make it easier for individuals to select the right products and get information.
Using a chatbot is cheaper and faster than developing a customer service department and hiring employees. Chatbots are 24/7, and a chatbot platform can serve numerous customers.
One of the problems credit card users often face is online theft and fraud
Banks are developing systems that inform users to prevent this. If chatbots can alert users to suspicious transactions, it can minimize fraud.
What are the use cases for chatbots in banking?
Lead generation and qualification
Chatbots can engage with visitors on digital bank websites to generate leads and qualify those leads with relevant questions.
The 24/7 availability, tireless and consistent nature of chatbots for customer support is an essential and obvious advantage for chatbots in banking. Chatbots can provide consistent and accurate knowledge and precise answers every time customers interact.
Long feedback forms and surveys can be tedious. A chatbot can engage customers through its natural language understanding and generation.
Personalized marketing strategies
Can analyze customers’ conversations with chatbots to personalize the bank’s messages for the customer.
How do you develop a chatbot for your bank?
Understand the limitations and difficulties of chatbot technology
A good evaluation of the capabilities and limitations of existing AI-powered chatbot technology can set the right expectations and goals.
Review how can secure user data
Banking companies are responsible for protecting the data collected by chatbots. The chatbot must be reliable in terms of data security.
Check how to secure transactions
Chatbots, especially those focused on customer service, increase the attack surface. The transactions they can perform, authentication procedures, etc., need to be reviewed to ensure a secure service.
Developing specialized chatbots
There are many use cases for banking chatbots, from lead generation to customer service. By starting with a domain-specific chatbot, you can simplify the critical requirements of any technology project.
Don’t allow your financial institution’s chatbot to be a failure. There are numerous instances where chatbots fail. Testing edge cases can help ensure that your company’s chatbot doesn’t fail as often as expected.
Be consistent across channels
Although integrating a chatbot system across messaging platforms is relatively easy, keeping the same chatbot system running consistently across these different platforms can be a challenge. Banks require to pay attention to the consistency of their services and messaging.
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