How often do you visit bank branches to do your banking? Probably not very often. Online banking has increased in popularity – it's no secret banks are being held to higher standards than before when it comes to creating a positive digital customer experience. Customers want faster service across all devices.
There are many potential use cases for chatbots in banking and there’s good reason to consider them: chatbots in banking are one of the solutions that can help you compete with emerging industries like fintech.
Banks like ATB Financial and the Bank of America (BoA) have been early adopters of AI chatbots. For instance, the famous BoA chatbot “Erica”, which launched in 2018, has served more than 10 million users since then and was able to understand close to 500,000 question variations by mid-2019.
Erica communicates with consumers in three ways: voice, text, and tap (users tapping options in the app).
Along with BoA clients, the general public seems to actually like using chatbots for banking. According to a 2018 survey: 44 percent of people surveyed would rather communicate with a chatbot than a real person – assuming it can answer questions as reliably, of course.
Research also suggests that 61 percent of people even think a chatbot can provide faster service than a human.
In fact, there are a whole host of ways chatbots make banking a smoother experience.
What are the benefits of chatbots in banking?
Chatbots used by banks and financial institutions have the power to:
- Improve customer service. Conversational banking is the future. Some particularly important elements of customer service and support – like speed, access to information, and pleasant interactions – are more achievable with the help of chatbots in banking.
- Personalize customer experience. Sixty-three percent of consumers expect personalized service. Chatbots can provide this by utilizing consumer data (although consumers will have to agree to provide that data via the chatbot).
- Reduce lines at bank branches and phone waiting times. Consumers don’t have to wait in line for a teller, or sit around twiddling their thumbs on the phone, if their issue can be solved by a virtual assistant.
- Decrease costs. Chatbots can deliver cost savings of over $8 billion per year by 2022 in the banking and healthcare sectors. By some reports, traditional financial institutions can cut 22 percent in costs by 2030 representing $1 trillion in projected cost savings using artificial intelligence.
- Help employees do their job better. Sixty-four percent of agents supported by AI chatbots are able to focus on solving complex problems instead of getting hung up on answering basic queries, compared to 50 percent of agents without this support.
- Build a clearer picture of customer needs. Chatbots can collect data from interactions with customers (e.g. most frequently asked questions). They can also be used to administer surveys and gather direct feedback from customers.
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How can a chatbot do all this? Here’s how:
12 potential use cases for chatbots in banking
Chatbots in banking can be used to:
1. Send money
A no-brainer for chatbots; users can pay their bills, monitor money transfers, and set up or cancel payments if needed. Chatbots can also help users charge up their pre-paid cards or pay off credit card bills.
2. Check balances
Users can ask chatbots to provide the balances for accounts under their name. AI assistants can also provide balance estimates and alert users if balances are in danger of falling below a certain amount. This helps consumers manage their accounts better without having to log into their e-banking account or speak directly with their bank.
3. Review and adjust accounts
Apart from balances, users can ask about other aspects of their accounts, such as card bonus points, recurring payments, and expense and transfer limits. Users can also retrieve their account info and make changes (e.g. updating a phone number or address).
4. Provide basic answers
Chatbots can answer various non-complex questions about banking products or customer accounts. These questions may include “How do I apply for a credit card?” or “What’s the interest rate in my savings account?” The same goes for navigating mobile apps or e-banking, and finding FAQs.
5. Give location-based answers
The answers to user questions might vary depending on their location. For example, if a user asks “Are there additional transaction fees with this card?” or “Where is the nearest ATM?”, the answer depends on where they are. Chatbots can capture that location via GPS on mobile and provide the correct answer each time.
6. Send reminders
Chatbots can be programmed to send useful reminders, like for bill payment deadlines or to bring specific documents for finance processes (e.g. loan applications). They can also send important notifications, like banking news and changes in credit scores.
These push notifications may even make customers aware of things they would never previously have been, and so increase customers’ usage and understanding of banking services.
7. Provide faster service to urgent issues
Banking chatbots can help consumers with issues that may be non-complex, but are nonetheless urgent. This includes locking or unlocking cards, resetting passwords, completing money transfers, or checking bank statements. These functionalities allow customers to go through stressful processes without the added hassle of waiting around on the phone.
8. Monitor transaction history
Consumers can ask chatbots to provide an overview of their transactions, and get a recurring weekly or monthly report on spending, helping them better manage their finances. Chatbots can also send alerts whenever a charge, deposit, or refund occurs in the account.
9. Apply for services
Chatbots can help consumers go through the process of applying for loans, new cards, or reward programs. The chatbot has all the information needed to make it a smooth experience – like what documents are needed – so when consumers complete forms, they can get immediate assistance and answers to their questions.
10. Assist in cases of suspicious activity
Chatbots can send notifications about suspicious charges and take immediate action when the consumer asks them to (e.g. lock a card). A bot can also provide instant help if a consumer believes their account has been hacked and prioritize these requests when connecting them to live agents.
11. Provide insights
In addition to providing balance estimates, as we mentioned before, chatbots can provide a range of useful insights for consumers, like their spending habits, overview of recurring charges for the year, and charges on specific months or specific locations. They do this by collecting and analyzing data, thus acting as financial advisors, too. This is one of the potential use cases for chatbots in banking that are especially useful for people who don’t have easy access to financial advice services (e.g. because of budget or location).
12. Engage consumers
Apart from an app, chatbots can also be deployed on the website of a financial institution, usually within online banking, but potentially on browsing pages, too. There, it could initiate conversations with visitors, analyze their behavior or interests, and ask them if they’d like to learn more about banking products. The bot can even be used to gather feedback from users on how to improve their experience.
There are lots of potential use cases for chatbots in banking – many of them already a reality for dozens of big banks and financial institutions. But, in all of these use cases, there’s one consideration that’s very important to keep in mind: security.
Data protection matters in every industry – even more so in banking. The damage of a data breach in the chatbot used by Delta Air Lines, where the credit card details of up to 825,000 customers were exposed, resulted in a serious lawsuit. Imagine if that breach had happened to the institution people actually entrusted that money to.
Customers expect you to fully protect their information and money. But you also need to let customers know how exactly you’re ensuring their privacy and shielding their accounts. Provide customers with security instructions, too, like setting a passcode on mobile to protect the mobile app.
So, whether your bot is available via a mobile app or a messaging app, get your IT team involved and listen to feedback from customers on how secure they feel banking via a chatbot.
How can you get started with a chatbot?
If you want to start building and implementing a chatbot for your organization for one of the potential use cases for chatbots in banking, here are some steps you can follow:
- Choose software. To build the bot, you need to have a platform that can both help you create the bot and also connect it to your data sources. It’d be great if your chatbot could also be deployed on multiple devices and operate in various languages. Acquire is software that helps you build chatbots, either via the platform itself or via integrations with services like IBM Watson.
- Pay attention to chatbot scripts. The better scripts you build, the more questions your chatbot can answer and the more helpful and pleasant the interactions will be. Make sure you write some personality into your chatbot, too, helping it to stand out while being representative of your brand.
- Gather feedback. As with all applications, your chatbot will go through a testing and refining phase. Ask customers their opinions and act on them to make your chatbot a delight to talk to. A chatbot powered by AI even has the ability to continuously learn and improve via its interactions with people.
Request an Acquire demo to see how you can craft and launch a chatbot.