According to Gartner, by the year 2020, it is estimated that customers will manage 85% of their relationships with the bank without directly interacting with a human.
Another statistics reveal that Chatbots are expected to save banks between $0.50 and $0.70 per interaction. While by 2022, banks could automate up to 90% of their interactions with chatbots. (Foye, 2017)
This shows that the power of AI in the banking sector has been leading and providing an opportunity for a new form of engagements. For instance, AI-powered chatbots are helpful in improving customer services and that is why most of the banks and retailers are heading to chatbot development companies. They must have realized the fact that chatbots are the real cost cutter and customer engager than any other tool.
Challenges Faced by Banks and Financial Institutions
Banks and other financial institutions face a number of challenges. Let’s have a brief overview of them.
Consumer Expectations: When it comes to money-related matters, consumers are highly sensitive and expect flawless, consistent and customized customer service. The banks have to be extra vigilant in meeting those expectations in order to avoid any discrepancies.
High Competition from FinTech Companies: FinTech companies have proved to be the biggest challenge for the traditional banks. They use software to deliver financial services making it difficult for traditional banks to come up with cultural, technical and operational refurbishment.
Regulations are getting Harsher: The regulations are getting harsher and stricter for financial institutes and banks. Therefore, banks have to spend hefty money on developing systems and processes that cater to compliance.
ROI is Low: Return on Investment is usually lower than what they spend due to the challenges faced by them from time to time.
Considering the above challenges, let us have a look at how chatbots can facilitate banks and financial institutes.
Customer Support Better than Ever
Customers are always right and they are the king. They need timely solutions to the queries and assistance they need. Especially, talking about the financial matters, customer support is the backbone where the untimely response can result in huge financial losses and fraudulent activities.
For instance, a person has been credited without his/her involvement in the transaction. It requires instant support in order to prevent further transactions. Chatbots can be a great way to offer assistance and timely solution to the customer such as blocking the credit or debit card instantly to block any other transaction.
Chatbots can provide assistance 24/7 without human involvement. For example, a person needs to know about his account balance or need activation of the card. After asking the details, the chatbot can provide the necessary assistance needed by the customer.
If undecided on which chat bot to choose, here is a great resource from AllFront that covers everything about the best chat tools available.”
After this sentence: In case, you don’t want to be notified about the new offers and promotions, ask the bot to stop it.
Offer Assistance about Banking Products/Services
For a layman, it is quite difficult to understand the banking products or services. Moreover, the complexities involved in these products/services are inestimable. Considering a person who wants to invest in mutual funds expecting high return every year might need to know the tax deduction, expected returns, minimum investment or maturity period.
Chatbots can assist by asking few questions such as how much will they be able to invest, what is the total savings and expenses, and similar questions needed to match the requirements. Imagine, if human handled it, there might be the possibility of errors and skipping of some important questions needed to fulfill the basic requirements.
Prevention of Fraudulent Activities
Banks have to be vigilant when it comes to fraud and other suspicious activities. Customers have a strong bond with the banks and place their trust blindly. However, if there were any discrepancies, customers would have concerns regarding security practices. Take an example as discussed earlier where you didn’t recognize the transaction, but have been notified about it.
To address this problem, AI chatbots can effectively monitor and notify customers about any fraudulent activities taking place. It will not only notify instantly but also help you take steps in order to avoid such fraud. The problem can be resolved in few minutes instead of calling a human representative and wasting time on telling details, which might result in some more fraud activates.
Recommending Products and Collecting Feedback
A wide array of products and services are offered by banks. Every customer has its own preferences, spending and saving habits, and investment. The brief information that you provide to banks is not enough for any human to judge and recommend a product suiting your needs. Moreover, sometimes a call by sales representative presenting you with new products or services introduced would annoy you.
However, in case of AI chatbots, the things are quite simple and pleasing. Chatbots can collect data based on your previous chats, profile and past behavior. It can deliver and recommend products that are well suited with your profile. In case, you don’t want to be notified about the new offers and promotions, ask the bot to stop it.
You have come across a glimpse of chatbots in banking and financial sector. There is a lot more to come. However, if you are serious about staying in competition and meet customer expectations, make sure to invest in latest technologies.
