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How conversational banking changes user experience: current use cases and future prospects


Maryna Cherednychenko - July 13, 2020 - 0 comments

The evolution of the bank’s interaction with a client has a long history. Customers gained their first self-service experience with the advent of ATMs in the late 1960s. Further, in the 80s, telephone banking appeared and allowed clients to receive a sort of remote consultations. In the early 90s, banks expanded communication channels to dial-up modems. At that time, buying a home computer was a costly affair, so the growth of online banking in the early years was minimal. A real breakthrough was the emergence of a graphical browser and the Internet, which promoted the extensive use of PCs.

Despite the growing popularity of Internet technologies, many banks took almost 20 years to train customers to use this channel. Mobile banking faced the same problem. It arose early in 2000, but it was adapted to customers’ needs only a few years later.

Today, we have entered the era of conversational banking, which uses artificial intelligence to provide customer service and more. In this article, we will dig deeper into the technology, name its benefits, and review a few use cases.

 

evolution of banking technologies

Evolution of banking

What is conversational banking?

Conversational banking is an innovative self-service channel that uses AI and ML to communicate with clients. According to Dharmesh Mistry, a writer of Chatbots Life:

“Conversational banking is a bi-directional interface between a customer and a bank, where a conversation can be initiated by either participant through a voice, text, or visual interface.”

The channel assumes that a robot does the talking on the bank side. Yet, it can forward the client’s call to a human operator if necessary.

It is essential to understand that conversational banking is a broad concept. It is not limited to text or voice chat. By the way, the last two are some of the CB interfaces that we will cover later. 

The technology itself means smart interaction with the client. The goal is to learn the needs and offer the best possible solution.

Conversational banking interfaces

An interface should be understood as a way of interaction between a client and a finance bot. Chat with AI, as well as with human beings, occurs in oral, written, and sign language forms. Below, I have provided a full list of the conversational banking interfaces available today.

 

  • SMS or more progressive RCS
  • Chatbots
  • Voice bots, like Siri, Alexa, or Sophie
  • Material robots. Some large banks have adopted them to perform simple functions. For example, HSBC robot pitches credit cards and assists human colleagues in financial deals.
  • ASL stands for Automated Sign Language. It recognizes the sign language of deaf people and translates it into text.

 

Conversational banking interfaces

Conversational banking interfaces

Rise of conversational banking

Smart technologies are growing fast because they provide clients with excellent banking experience. Thanks to CB, users solve financial issues in minutes with a minimum of time and effort.

As of today, the most popular CB interfaces are chatbots and voice bots. According to Chatbots Magazine, 43% of Americans prefer to contact the bank through these channels, 68% of surveyed think that instant messaging will change the user experience for the better.

As reported by Humley, 44% of US respondents would prefer to speak with a chatbot if its answer would be as reliable as the one from the human manager. Besides, 80% of financial companies worldwide consider chatbots as a great opportunity.

 

Rise of conversational banking in fugues

Rise of conversational banking in fugues

Why use conversational interfaces

Dialog interfaces are popular because they are clear and easy to use. If you compare them with mobile apps, the latter ones lose. The point is that the users have to adapt to every new app they launch. By contrast, chat bots for customer service work through the usual messenger interfaces, making the user experience more relaxed.

Another benefit is avoiding the installation step. Acting through standard platforms like Kik or WeChat, CB enables instant connection with the bank. Besides, the user skips version updates and saves phone memory.

A variety of interfaces allows everyone to choose the most suitable communication channel. The presence of voice bots makes UX even more advanced, letting you interact on the go.

In addition to the above features, conversational banking has many other pros for both users and owners. Let’s quickly review them.

Benefits for customers

  • Round-the-clock accessibility
  • High-quality service
  • Mixed robot&human support
  • Personalized approach
  • Proactive engagement

Benefits for owners

  • Cutdown of costs – more bots, fewer human operators
  • Error reduction – less human factor, fewer emotions
  • Сontinuous development – conversational artificial intelligence learns through experience
  • Business flexibility – easy way to reduce or increase the number of bots at any time
  • Greater user base – potential customers can reach the bank through a chosen channel

 

Benefits of conversational interfaces

Benefits of conversational interfaces

Typical use cases of chatbots in banking

AI chat takes UX to the next level making it less visible and more productive. Even though smart assistants cannot fully replace humans, they have taken the lion’s share of their job. Let’s see what work the robots are assigned to.

Frequently asked questions

The primary duty of customer service bot is to resolve simple repeated issues. They often relate to password recovery, card lock / unlock, reaching the nearest ATM, etc. A big plus is that the bot can immediately help with these issues, which is crucial in urgent situations.

Account service

The bot in finance can give detailed information on the bank account. Upon the client’s request, it provides transaction data, including crediting and debiting funds, data on deposits, credit conditions, and so on.

Financial advice

AI bot uses intelligent tools to analyze the user’s economic behavior. Considering their income, expenses, and everyday purchases, it advises on saving and budgeting options.

 

Chatbots in banking

Chatbots in banking

Examples of banks that use AI

More and more banks are using AI to improve their service and update workflow. Here are some conversational banking examples for your reference.

US Bank 

With the help of AI, the bank gets closer to clients by delivering an excellent service, reducing risks, and fighting fraud. It has three voice agents: Google Assistant, Siri, and Alexa. They consult clients on different devices providing comprehensive information about banking products.

The bank is continually upgrading its security system. It uses ML to study behavior patterns to identify dishonest clients and reduce the number of fraud cases. US Bank has internal AI solutions. Also, it uses external tools provided by partner companies.

Citi Bank

The bank has launched an analytical platform that collects and processes user data in real-time. A detailed user profile shows bank-related activities, such as a frequency of app usage or a reason for contacting support. AI and ML help the bank better understand customer behavior. This data is used to create personalized offers and deliver them at the right time.

Capital One

The bank applies AI and ML to interact with customers and set up in-house processes. It has a customer support chat bot that consults on banking services and collects user data used for personalized offers. Capital One has spent a lot of time creating a corporate system. It invests heavily in internal engineering.

Future of smart banking. Conversational commerce

You may be familiar with the notion of conversational commerce. It means the interaction of online buyers and sellers through text messengers and voice bots. The main benefit of conversational commerce is the ability to shop directly from the chat, apart from receiving consultations.

Transferring this experience to the banking sector may be highly beneficial. Even though AI has penetrated the financial sphere, the clients still need to do many things by themselves. In the nearest future, we may see broader robo expansion. In particular, the users are expected to “shop” online in banks similar to how they do it in retail stores. Imagine a situation when you say, “Hey Siri, get a car loan for me, please.” and, in a few minutes, you get all the things done.

What steps should banks take to become conversational?

The adoption of new technologies is always complicated since many processes need to be rebuilt. Conversational banking is a new stage of the banking sector evolution. Although many have already joined it, some players are still overboard. 

At Softensy, we often work with financial institutions. Based on our experience, we suggest four steps on the path to conversational banking.

Promote live chat

Teach users to contact the bank through chat when a question arises. Place the chat button on the official website, in social media, and mobile app. Let the user feel that your managers are ready to help at any time of day and night.

Let chatbots assist humans

Free managers from routine tasks and delegate them to bots. The latter ones do a great job with simple questions and, sometimes, with more complex tasks. Moreover, unlike humans, the bot can process several requests at the same time.

Involve related technologies

Chatbots can guide users through banking products, co-browsing the official website or app. They may supplement the journey with text or voice conversation, giving useful tips on the go. Dual cursor and screen comments will make the UX even more advanced.

Adhere to security standards

Transfering banking experience to messaging platforms, you face a new challenge of possible malicious attacks. To avoid them, follow security regulations. In particular, pay attention to PSD2 and open banking that set new rules for online transactions.

Grow your banking business with conversational commerce

Conversational banking and conversational commerce open up new opportunities for communication, services, sales, and overall business experience. They provide fundamentally new touchpoints between sellers and consumers. In banking, such technologies help quickly make financial decisions and set goals. If you want to offer your clients the best user experience, consider involving the AI customer care system.

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