Since it requires top-notch levels of efficiency and security, banking is one of the sectors most influenced by the tech enhancements in our digital era. Further, users demand and expect much from the banks they trust to manage their finances. As you may well know, AI has become a complete game-changer for banking, helping provide users with next-generation experiences. However, things started to get interesting when Conversational AI came into play. Natural Language Processing (NLP) has brought a new world of possibilities to the banking sector. While that primarily involves customer service and user experiences, that’s just the tip of the iceberg. Let’s explore the implications of Conversational AI in banking.
How has Technology Changed the Banking Industry?
Since the 20th century, we’ve seen quick changes regarding how banks interact with their users. Not so long ago, customers had to physically go to their banks to perform almost every transaction, including deposits, withdrawals, and money transfers. All transactions used to be recorded on paper, and we had to stick to the limitations of banks only working during business hours. Imagine how long people had to wait before they invented ATMs! Digital banking has brought us quick transfers that are easily doable with our phones, having 24/7 accessibility. Conversational AI has introduced instant, personalized interactions with machines or web interfaces in a human-like manner.
NLP and powerful Machine Learning algorithms help provide a unique, user-centric approach to customer service in banking. Plus, experts argue that AI bots strongly impact conversions, customer acquisition, retention, and engagement. As you can imagine, that’s completely shaping the industry. Gartner estimated that AI would power 90% of customer interactions by 2023. Other experts already think of AI as the new face of banking. Over 60% of people already make banking operations using their smartphones, which opens the door to more and more AI-powered solutions. But how can the banking sector benefit from Conversational AI?
How Does Conversational AI Impact the Banking Industry?
Plenty of companies that work in banking are largely benefiting from Conversational AI. So, in case you were wondering, AI in banking isn’t a futuristic idea. It’s already happening.
Conversational AI for Customer Service in Banking
Let’s begin with the most obvious. As mentioned before, Conversational AI can provide world-class customer service 24/7 with high accuracy. Conversational AI tools can handle endless queries, providing users personalized answers based on their accounts. Personalization goes beyond being able to access your bank records. Believe it or not, bank customers claim they’ve had pleasant conversations with Conversational AI tools! Thus, we can add "a winning personality" to the list of Conversational AI benefits. In case you didn’t know, the Royal Bank of Scotland uses Conversational AI to handle around 500,000 customer interactions a year.
Conversational AI for Customer Acquisition in Banking
It shouldn’t be surprising that new frictionless and personalized means of communication impact customer acquisition. Conversational AI can seamlessly automate multiple channels like websites, emails, and messaging apps to interact with potential customers. Having a super smart assistant for filing insurance claims can be extremely beneficial. With Conversational AI, some banks have increased conversion rates in insurance forms to nearly 90%.
Conversational AI for Customer Retention in Banking
Up to 40% of customers prefer round-the-clock support, and banking is no exception. Conversational AI tools allow personalized notifications, recommendations, offers, and customer feedback. Plus, Conversational AI can give customers timely alerts and valuable insights. Some AI assistants even adopted humor and emojis to help create a deeper connection with users. There’s no doubt that AI has a massive impact on customer retention. Large financial institutions like Bank Of America, DBS Bank, and IIFL use Conversational AI as part of their customer retention strategy.
Conversational AI for Customer Loyalty in Banking
Allowing users to stick to their existing communication channels greatly impacts customer loyalty. Experts mention that banks that embrace that principle are leading the battle for customer loyalty. Machine learning Algorithms and Natural Language Processing (NLP) help banking AI assistants understand context much better. As a result, it’s much easier for users to solve their problems and get the right information at any time they want.
Conversational AI for Compliance in Banking
We can’t stress enough how important it is for banks to comply with regulatory laws. That’s one more thing Conversational AI can help with. That extends to non-financial information, including Know Your Customer (KYC) and SOC 2. Again, Machine Learning can be a powerful tool to help verify users’ identities and risks. In this manner, implementing face and optical character recognition also helps reduce the risk of error and fraud. Conversational AI makes it much easier for banks to audit, monitor, and track users’ data. All this translates into banks being able to comply with local regulations easily. Even generating the documents that prove compliance becomes way more convenient thanks to Conversational AI.
Why is Conversational AI so Important in Banking?
Banking is a highly complex and regulated sector that greatly impacts our quality of life. The whole world’s economy highly relies on banks working properly. As a result, we have big expectations and demand a lot from them regarding efficiency. Every day, more and more financial institutions embrace the power of Conversational AI to provide their users with more value and better experiences. It may not be mandatory for businesses that operate in banking to use Conversational AI. However, it’s advisable for all firms to use the best tools available to give their customers the best possible experience. As mentioned above, Conversational AI can potentially grow customer satisfaction, acquisition, retention, and loyalty. Finally, it’s worth noting that Conversational AI in banking can also help reduce operational costs.
Final Thoughts
The endless possibilities and benefits Conversational AI brings to the table perfectly align with banking. Conversational AI simply checks all the boxes. Apart from providing customers with world-class experiences, you can also use Conversational AI to streamline internal operations. NLP can help managers, agents, and employees make better decisions and solve problems faster. On the other hand, the Machine Learning algorithms used by Conversational AI tools can support data analysis and visualization. Once again, it checks all the boxes.
At Funes, we aim to combine the power of Conversational AI with the specific intricacies of your business to go above and beyond. We firmly believe this approach can help drive business growth in various industries, including banking. Feel free to reach out if you’d like to learn more about how Funes can help you achieve your business goals.
