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Learn what are banking chatbots, how to use them, the benefits, and use cases
Today’s banking customers don’t want to visit your branch or speak to a rep over the phone. They want a digital experience. Over three-quarters of Americans now use their bank’s mobile app for everyday banking tasks.
Customer support needs to be digital, too. In-app live chat is a great start, but a banking chatbot takes things to the next level. With a banking chatbot, financial institutions can provide a personalized, automated service that delivers everything customers expect while saving the bank time and money.
In this article, you’ll learn everything you need to know about banking chatbots, including:
A banking chatbot is an AI-based conversational bot that acts like a virtual assistant to provide real-time support to bank customers. A banking chatbot can prevent customers from having to speak to a human customer support representative using a combination of artificial intelligence and question-answer combinations.
Chatbots are at the front of the banking industry’s new automation efforts focused on conversational banking. Where ATMs and apps provided machine-based support in the past, chatbots and other conversational banking tools allow banks to automate customer interactions wherever they are and in whatever form they take.
Banking chatbots offer multiple benefits to financial institutions when used as virtual assistants.
Self-service - Before smartphones, most banking queries required the help of a human customer support agent. Customers had to waste time in queues to speak to a teller or sit on hold. Today, chatbots provide a self-service digital assistant feature to customers seeking to achieve most routine activities. Whether it’s checking account details or finding information on a specific branch, chatbots can help customers help themselves and complete a process quickly without needing to speak to a rep. Chatbots won’t replace human customer support reps completely, but agent time will be freed up to focus on more complex and demanding tasks.
Reduced costs - When customers can use chatbots to complete routine banking activities themselves, banks can drastically reduce customer support costs. Research has found that banking chatbots will save banks $7.3 billion in operational costs by 2023, up from $209 million in 2019. A Freshchat client in the financial services sector saved over 10,000 hours of agent time by incorporating an AI chatbot that responds to simple questions like “What’s my account balance?” Such a query would require an agent three minutes to complete. With Freshchat, their chatbot completed the request instantaneously.
Chatbots can change this. Over thousands of conversations, chatbots can collect customer data they can use to personalize services and guide future strategy decisions. What’s more, with the right platform, chatbots can use AI to learn from conversations and provide better service in the future.
For banking chatbots to deliver the benefits above, they need to have the following characteristics.
A non-AI chatbot can be an effective tool for answering if-this-then-that or yes and no questions. With carefully preset rules, these chatbots can handle most simple banking queries. But that shouldn’t be satisfactory for banks. Instead, banks should look to conversational AI chatbots that use Natural Language Processing (NLP), Natural Language Understanding (NLU), and Machine Learning (ML) to deliver a more personalized human-like experience.
Cost savings is just one aspect of the benefits that chatbots offer to banks and their bottom lines. They can (and should) be used to increase revenue, too. Typically, customers only use a fraction of a banks' products or services. A chatbot can act as a personal sales rep suggesting the most relevant financial products to every customer based on their data. They can even streamline the application process to increase sign-up rates.
Banks should provide customers a seamless experience whether they are accessing their bank in a branch, via their mobile banking apps, or through a banking chatbot. To that end, your chatbot software should be able to customize your chatbot to match your bank’s branding, language, and messaging guidelines.
Banks can’t afford a single weak spot in their customer-facing applications — and chatbots are no different. Because they increase the attack surface of banks, chatbots must comply with strict regulations. Freshchat’s chatbot has a multi-tier data security model and end-to-end security and is GDPR and ISO 27001 compliant.
Your banking chatbot must be accessible to customers across multiple mediums, including smartphones, the web, and messaging apps like WhatsApp.
Banks can pick and choose from the following use cases for their chatbot.
With a banking chatbot, customers no longer have to bother customer service reps with easy-to-fulfill tasks and queries. They receive a significantly faster, more private, and more reliable service as a result.
Banking chatbots can automate common activities like sending money, moving money between accounts, and paying bills. They can also give customers a breakdown of their financial activities, like spending habits, monthly bills, or account balance requests.
Customers shouldn’t have to ring up their bank branch and wait on hold to get answers to common questions. By using chatbots, banks can help customers get answers to questions like:
What’s my balance?
What time do branches open?
What’s my interest rate?
How do I apply for credit?
Better still, banks can use chatbots to provide this service round the clock at little cost.
Banking chatbots aren’t limited to offering support when customers ask. They can take a proactive role in customer service, sending payment reminders to customers, giving them updates on their credit score, and asking customers if they need assistance after they’ve spent time on a page of your bank's website. These kinds of push alerts elevate the customer experience and help deliver the personalized service that customers now expect from apps.
As discussed above, you can use chatbots to take the place of salespeople, not just customer service reps. Their conversational nature makes them the perfect tool to improve form-based signups for products like mortgages or credit cards. It makes for a much more appealing experience that can lead to higher conversion rates. They may also be able to provide instant approvals.
Fraud, sadly, remains an ever-present problem in the online banking industry, but chatbots can help fight the battle against fraud. Specifically, you can use proactive messages from chatbots to help customers spot the early signs of fraud.
A chatbot can alert customers immediately whenever there is suspicious activity or unauthorized account access. Once alerted, chatbots can guide customers through the fraud reporting process.
The benefit of using a chatbot rather than a customer service rep for this task is that chatbots can use data access to spot fraud instances in real-time. No review is necessary. An alert can be sent as soon as suspicious activity has been identified.
Chatbots are quickly becoming essential customer support and sales tools in the banking sector. They provide a range of benefits, from a better customer experience to increased adoption of your various financial products. Finding the right chatbot tool is key to unlocking these benefits and use cases. Freshchat is the perfect platform to build a banking chatbot thanks to:
Conversational AI intelligence
Leading data privacy and security features
Integration with web, mobile, and messaging apps.
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