The banking sector must reinvent itself in the course of digital transformation. Technological developments, such as the mobile payment sector or the blockchain, have occupied banks intensively in recent years. But the way in which banking interacts with customers will also change in the course of digitalization. Chatbots play a central role here.
Today’s banking client has very different expectations than he did just a few years ago. Equipped with increasingly sophisticated digital knowledge, they also expect their banks to use new technologies such as artificial intelligence, deep learning or chatbots in the service or transaction process. Banks all over the world are therefore currently testing the use of these technologies.
Advantages of chatbots in banking
The use of chatbots in banking offers many advantages for banks. Especially the decentralized interaction with customers plays a central role in banking. A branch is not always available, so the expansion of online banking is an important factor for the future of banking. The following advantages can be identified through the use of chatbots:
- User friendliness: The intuitive use of chatbots in customer communication helps credit institutions to offer a simple, innovative and contemporary form of interaction, which can be increasingly individualized by artificial intelligence
- Cost savings: Compared to classic banking applications and apps, chatbots are considerably cheaper to develop and can be further developed in a simple way.
- Virtual financial consultation: Some banks already use Chatbots, which are active in the financial consultation today. By the advanced algorithms the Bots can give due to the deposited customer data optimal financing recommendations and pieces of advice for an individual financial management.
- Simplify standardized processes: Standardized processes, such as opening a new bank account, can be adopted by the chatbots through adaptive programming. They only need to be taught in initially and can thus relieve employees of annoying tasks. Even simple support questions can be processed in this way.
Examples of chatbots in banking
Conversational Banking via Chatbot (Source: In the Chat)
Today, some banks are already taking advantage of chatbots for their customer service, whether via messenger services or directly integrated into online banking portals and websites.
Over the next few years, according to a study by Juniper, more and more banks are expected to switch to chatbots. In the banking sector, for example, annual cost savings of over $8 billion can be achieved.
Examples of financial chatbots can be found at the Royal Bank of Scotland. In 2016, the Royal Bank of Scotland introduced the cognitive chatbot Luvo to relieve its customer service of routine tasks. The bot is based on the Watson solution from the tech giant IBM and is also very popular with the bank’s employees. Luvo can answer simple questions via chat and continues to improve through machine learning.
The US market leader, Bank of America, has also introduced a chatbot to provide its customers with the latest news. This allows the bot to provide account information, make savings suggestions, and execute wire transfers. The banking chatbot is designed for simple online banking tasks that offer added value for the customer.
Chatbots will fundamentally and lastingly change the banking sector in many areas. Even though customer service and automation processes will be at the forefront of the initial stages, in the long term the integration of artificial intelligence and alignment with customer needs will play a central role in the success and acceptance of the solutions. With the continuous evolution of artificial intelligence and the rapid advances in Conversational AI, the future of the financial services sector is becoming more interactive and individual.
