Do you enjoy communicating with your bank? Nobody does, including your customers. But introducing chatbots can improve communication drastically. No queues, no multi-page agreements, no stress. If you offer a chatbot to your customers, your relationship could flourish.
One of the key technological trends these days, chatbots have even entered the highly conservative financial industry. That’s because customer satisfaction remains a top priority for banks, just like for shops and other online services. When people want high quality services, businesses give it; if they don’t, businesses trail far behind.
Research by Gartner states that consumers will manage 85% of their business communication with banks via chatbots by 2020.
Why do users prefer chatbots to live communication?
The biggest reason is the change in the core audience. Millennials and Generation Z have an entirely different way of thinking and different priorities than baby boomers. They chat and Google, travel, manage their businesses online, multi-task, and rely on their smartphones more than their spouses.
These modern generations can’t afford a slow chat with a bank representative in the office to review their monthly expenses, replenish a card, or sign a new agreement. Quick and precise problem-solving on-the-go is why they use chatbots for payments, traveling, and shopping.
Potential benefits of chatbots: Millennials vs Baby Boomers
AI chatbots are a way for businesses to reach out to this new, agile audience and set up an ongoing and meaningful conversation with them. But is it profitable for banks? Is it worth the effort of finding an experienced vendor, building a complex FinTech solution powered by AI, and reshaping the entire business process that has been tried and tested over many years? Spoiler alert: it is, and Intellias has the expertise to prove it.
Five essential benefits of chatbots for business
Every company strives to optimize their processes while providing high-quality service. The use of chatbots in business helps companies achieve both of these goals. AI chatbots can easily deal with vast volumes of data and answer customers’ questions instantly. Moreover, modern chatbots, with their standardized replies and flat tone of voice, appear more natural and friendly than typical human support agents. Here are the key reasons why financial companies should consider creating AI-based chatbots both for their clients and for their internal operations.
Personalized banking services
AI chatbots serve as virtual financial advisors, helping users get exactly what they need. Bank customers can ask questions and get replies in a couple of seconds. No need to call the bank or browse the card history to find out how much you spent on restaurants last month.
A customer may ask for advice on better budgeting, the most convenient savings plan, deposit options, and so on. And the chatbot will offer only relevant financial products, since it knows the background of each particular customer.
With chatbots, banks can effectively use information about their clients: what type of card they use, how often they use it, what they buy and where they buy it, when they pay their credit card bills, and so on. The ways of leveraging this information are endless, and it takes an AI-powered chatbot to process it. How long would it take for a bank representative to do all of that?
Banks say they plan on using chatbots in the near future
Round-the-clock customer support
Round-the-clock customer support is the most obvious reason to use a chatbot. Chatbots answer anytime, regardless of work hours and traffic peaks and exactly when the customer needs an answer. If you have a problem with an ATM while visiting a foreign country, a chatbot can help you solve it in a matter of minutes instead of going through the hell of the call center. When you need to increase your card limit to buy plane tickets to the Maldives that are on sale, a chatbot can do it instantly. What if by the time you finish your phone call with the bank the tickets are gone?
AI chatbots can deal with 80% of customers’ requests. You still need human support to help with the most complex 20% of tasks, but the cost efficiency is tremendous.
Potential annual US salary savings created by chatbots
Surprisingly enough, a call center employee may sound more robotic than a chatbot. While people are taught to answer questions using set phrases, chatbots can generate lively conversations and still be professional. Once you leave answering the commonly repeated questions to computers, your valuable bank employees can deal with more complicated requests.
Improved marketing strategies
Customer satisfaction is driving today’s businesses. Knowing who your target audience is and what they want are the key elements of success. Modern payment providers and FinTech companies offer a variety of products and services. But how do you know if, say, Mr. Lee could use a savings plan and Ms. Daniels would like to invest?
It would be hard for bank employees to figure this out on their own since it would require digging through tons of information and performing in-depth analysis. But a chatbot can solve the riddle in seconds just by chatting with a person. Certain questions or actions can lead a chat bot to conclusions that people may not arrive at. The next step the chatbot can then take is offering a specific banking product or service that will lead Mr. Lee and Ms. Daniels to a new purchase and, most importantly, leave them satisfied.
Companies can gather feedback and promote new products without frustrating customers. AI takes user analytics to a whole new level: chatbots help to produce valuable, real-time, and insightful reports that can be used to improve services and strategies.
Predicted use cases for chatbots
Strict identity protection and multi-level validation procedures are the key challenges of the banking industry. Tight regulations and licensing are among the top reasons why the field is so conservative.
In 2014, 13% of the entire US adult population had a card breached according to a report from Creditcards.com
With the rise of cybercrime, many people refuse to use chatbots because of security concerns. The answers to these concerns are fingerprint authentication, facial recognition, and encrypted conversations. With modern technologies, chatbots are more secure than phone calls or live communication with a bank representative. Besides, chatbots are actually helpful in fraud detection. They can find out in seconds whether a user has made a suspicious transaction and react appropriately by blocking the card and reporting a breach.
Detecting deviations from typical behavior is where AI rules. For more on this, read another article from Intellias about predicting financial markets with AI.
Easy payment processing
Social media chatbots with payment functionality are a goldmine for businesses. The technology is a bit raw at the moment, but the outlook is promising. Monetizing chatbot interactions can generate up to $32 billion in revenue for platforms, Business Insider estimates. Just think about it: people don’t have to leave a comfy and familiar app to make a payment. All their cards and accounts are available to the chatbot, allowing users to make purchases and transactions without leaving their social media page.
Let’s take Facebook as an example: it’s full of products and services people can buy and order. Payments via chatbot are nearly instantaneous, so users don’t have a lot of time to reconsider purchases. This means frequent purchases, a constant flow of transaction fees, and more products and services that banks can offer to customers.
Who already uses chatbots for banking?
Almost all banks, from international giants to regional banks, use some online platforms or apps for payments. AI chatbots go a step further, and many banks have already implemented them into their processes or plan to do so in a year or two.
You’ve probably heard about some of the AI chatbots from top banks. Erica, Bank of America’s AI assistant has been around for two years already. Less than a year after Erica launched, Capital One introduced its first natural language SMS chatbot, Eno. American Express, Ally Bank, PayPal, and many others have followed. Their AI bots communicate with customers and learn and evolve, offering more precise answers, more personalized suggestions, and a broader range of services over time. They still can’t substitute human workers, but chatbots bring tangible benefits to businesses.
In its research on Chatbots, Juniper states that this technology will save financial services industry over $8 billion per year by 2022.
And if you think these numbers are overestimated, here’s a fact to consider: JPMorgan Chase, the biggest bank in the US, used a machine learning system called COIN to do 360,000 hours of finance work in a few seconds. That’s about 3,000 billable hours of financial lawyers. That’s all you need to know to start considering a chatbot for your business.
Top chatbot use cases by famous companies
The specifics of implementing chatbots into your business
The primary goal of a chatbot in the financial sector is to help people with banking issues. A customer shouldn’t have to study the chatbot’s functions and interface. You have to offer something familiar and simple. You can integrate a robust AI solution with Facebook Messenger, Telegram, Skype, and other popular messengers and apps. These messaging platforms can recognize and seamlessly interpret widely used languages and provide the same experience on mobile and web. Your chatbot will be regularly upgraded on new services available, and it will inform customers about new features and extended possibilities.
Creating and implementing a chatbot for payment businesses starts with finding the right vendor. Working with a vendor, you’ll define the key goals for the chatbot, analyze the ROI from its deployment, create user personas, and more. Companies like Intellias that have experience building AI-based solutions for FinTech will be your best pick.
Next, choose an NLP tool for building your chatbot. Some of the options on the market are:
- Amazon Lex
- Microsoft LUIS
- IBM Watson
Your choice depends on your technology preference, business needs, and required integrations. For instance, Wit.ai has the most extensive language coverage, while Amazon Lex is limited to US English only. However, Wit.ai doesn’t support integration with third-party tools, while Amazon Lex is compatible with many messengers, Amazon services, and popular SaaS platforms. As you can see, each NLP tool has its pros and cons, so it’s best to rely on AI experts to choose the framework and tools most suitable for your business needs.
Key aspects of chatbot development and integration
AI-based chatbots bring pleasant benefits to businesses. Setting aside customer satisfaction, chatbots save money as the rate of self-service grows, lead to better marketing strategies and targeting, and provide fast information delivery and improved fraud detection. Users enjoy the chatbot experience, and happy customers mean profitable businesses. In a couple of years, the majority of banks and digital payment companies will use AI in their processes in one way or another.
Catch up with the industry leaders. Contact Intellias’ FinTech experts to learn more about AI chatbots and innovative payment solutions.