Chatbots in Banking: How can it improve customer experience?

Ashish M. Shaji

28 Aug, 2020

In order to meet the growing and evolving customer demands and expectations, banks have been increasingly adopting innovative technologies. These technologies include Artificial Intelligence, Machine Learning, Chatbots, etc. This article focuses on the use of chatbots in banking.

What are Chatbots?

A chatbot, also called a bot, is a computer program designed to mimic conversation with human users on the internet. With the use of Artificial Intelligence, a chatbot can assist customers without the need for a customer service agent at the opposite end.

How can chatbots help in banking?

A well-designed chatbot can assist customers round the clock with conversation and can provide instant response to a query without any delay. It can improve efficiency and reduces turn-around time through quick information delivery.

The integration of chatbots in banking helps banks to do the following:

• Facilitate two-way communication by replacing channels like phone, messaging, etc;
• Offer quick transactional and customer support;
• Provide assistance of an employee;
• Measure customer satisfaction;
• Guide customers on financial matters;
• Streamline routine back office tasks;
• Offer personalized marketing strategy; and
• Provides specific user input, learns from customer feedback, and improvises, thus improving the customer experience.

What are some of the challenges with the use of chatbots in banking?

The following challenges are faced with its use:

• A chatbot is as smart as they are programmed to be. It means that the efficiency of a Chatbot will depend upon its programming.
• Handling multiple languages and dialects can be troublesome for chatbots.
• The training process of a chatbot is a lengthy process, and apart from it gathering data and cleaning, it also takes some time. 
• Chatbot lacks empathy, which is crucial for the long term relationship between customers and banks. Conversation with a chatbot may feel like robotic, and Customers may not feel the essence of human touch. 
• It is in its developing stage, and a human level cognizance aspect is still far away.
• As per reports, customers most often don’t get past the first text; thus, the retention rate is quite low.

Improve customer experience with chatbots in banking

Now bots are fulfilling multiple needs of banking, and banks are increasingly adopting this technology considering its utility.  In this segment, we look at chatbots as an effective way of improving customer experience.

• Personalized banking experience

With traditional banking, one had to put in a lot of time to complete the process because of the formalities that were required to follow, like standing in long queues, waiting for your turn to complete paperwork, etc. It was not just time-consuming but also tiring for customers.

However, all this has been made simpler, courtesy Chatbots. Consumers can access their income and expense trends to get help from chatbots in investing their money.

• Ease of Use

You may have experienced it in banking, where you are required to fill your banking details. Here chatbot can rescue you without compromising authenticity and the security aspect.

It doesn’t ask for any customer details; rather, they check their authenticity with their conversational elements.

A chatbot allows the customers to repeat their past transactions by using a single command. Customers also don’t require logging in to a particular platform to get the banking perks, as the bot will serve them with the best services available. 

• Automation of banking processes

The bank employees were not able to focus on other essential tasks that required time as they were occupied with tasks like customer assistance. However, with chatbots in banking, it has freed up bank employees by taking care of daily banking activities or by automating tasks such as resolving customer queries, etc. This has caused a massive improvement in the customer experience in banking of late.

• Personalized marketing experience for customers

Although banks perform a number of services to their customers, not every service may have the correct taker. Therefore to provide customers with personalized services, banks can accomplish this goal by deploying chatbot. The delivery of personalized services can improve the overall rates of conversion by 25 percent.

• 24*7 Digital Assistance

Banks have realized the importance of providing 24*7 digital support. In this, bots can help as they do not feel tired and can deliver exceptional services to the customers at any time. They can assist with queries about schemes or services or account-related concerns etc.

In case of a conversation on a helpline, queries may not be resolved in real-time, but a chatbot can resolve queries in no time. Moreover, customers can ask multiple questions in a single conversation.

• Fraud Prevention

A chatbot is attentive to actions taken by customers in real-time like swiping cards or withdrawing money etc. This is crucial to know to prevent unauthorized transactions. The chatbot can send a notification when a customer does a financial transaction^[1], thus preventing frauds using chatbots development services, and it, in turn, builds customer loyalty. 

Conclusion

Read our article:How to use Artificial Intelligence in Lending