How Chatbots Are Transforming the Retail Banking Customer Experience

What you need to know about chatbots in financial services

With consumers exchanging more than two billion messages with businesses via Facebook Messenger each month, the process of asking a brand for information digitally is well established — and to handle the rising volume of customers’ requests, AI-powered chatbots and digital assistants are proliferating.

This trend is in evidence across verticals, but it is particularly strong in financial services: according to research cited by eMarketer, 43% of consumers said in a survey that they prefer to address any issues they have with their banking provider via chatbot — more so than visiting a branch (35%) or finding the answer on a website (35%). Additionally, an estimated 90% of bank-related interactions will be automated by 2022. This means that financial service providers who don’t explore chatbots as part of their conversational AI strategy risk falling behind in terms of meeting customers’ expectations over the next several years.

Here’s what financial service providers need to know about employing chatbots — without losing the human touch.

Why chatbots in financial services?

For starters, chatbots are useful in financial services for the same reason they are everywhere — they offer greater opportunities for user engagement (as chatbots can perform tasks 24/7). There’s also the intelligence aspect. Over time, AI-powered chatbots gain a better understanding of how customers speak, making it possible for you to respond more quickly and more intelligently to a wide variety of queries — even in diverse languages.

For financial institutions specifically, it’s fairly easy to see why so many consumers prefer to address bank-related issues by using a chatbot. Your customers are likely to have more questions about the process of changing an account, initiating a loan, or applying for a mortgage than they might have about the types of business actions they take every single day. Add this to the fact that financial details are deeply personal — evaluating financial options and outcomes isn’t as simple as looking up a business’ hours on their website — and it makes sense why they would want to engage in a conversation before making a decision. Finally, consumers today are more comfortable than ever with these conversations taking place digitally. That level of convenience in the on-demand era beats out waiting in the lobby at a bank branch.

Financial services providers can address this need by building a chatbot that pops up on their website to answer simple questions, or by creating a more sophisticated digital assistant that also has the ability to take actions like sending bill pay reminders, scheduling appointments, and more, like Bank of America’s Erica assistant. Either way, the key is to be available to answer the questions customers want to ask, where they want to ask them — whether that’s on desktop, or on their smartphone as they research options.

Transparency about bots is key.

Studies show that customers are largely open to using chatbots. But that figure changes if businesses aren’t transparent about if, and when, customers are talking to a bot.

Research from Mindshare found that 63% of people would consider communicating with a chatbot to contact a business — but 48% said it feels "creepy" if the bot is pretending to be human. This is especially important when customers may be more likely to reveal sensitive financial information. They’re used to using digital services for all of their needs, but they don’t want to give up their information if they unsure of who they’re actually talking to.

Overall, employing chatbots as conversational agents can help financial institutions save money —  banks may save an estimated $0.60 on average per chatbot interaction — and address more customer questions. But it’s important to retain a human touch while doing so.

“The key to managing bots is the humans that develop and oversee them,” explained Manlio Carrelli, EVP, Enterprise Business Group at conversational commerce solution provider LivePerson, in a 2018 conversation. “We have had a lot of success turning contact center agents into bot managers.”

Read more about chatbots across verticals in our Great Marketing Minds series.

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