Guide to banking chatbots: Improving customer satisfaction with AI

Resolve common banking pain points with AI-driven chatbots

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Overview

Today’s banking customers don’t want to visit your branch or wait more than 20 minutes to speak to a rep over the phone — they want a digital experience. That’s why most Americans now use their bank’s mobile app for everyday banking tasks. This applies to customer support, too. 

While in-app live chat is a great start, a banking customer service 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. This includes what they are, how they can help your bank, their common characteristics, and how to use them. We’ll also show you know how to build the best banking chatbot. Let’s get started.

What is a banking chatbot?

A banking chatbot is an AI-based conversational bot that acts as a virtual assistant to provide real-time support to bank customers. Customers can interact with these bots in place of a human, and customer support representative. 

This is possible thanks to a winning combination of artificial intelligence, machine learning, and question-answer combinations. 

Chatbots are at the front of the banking industry’s new automation efforts focusing on conversational banking. Where ATMs and apps provided machine-based support in the past, chatbots and other conversational banking tools allow financial institutions to automate customer interactions. 

A quality banking chatbot can learn from each conversation, becoming more innovative and effective as it communicates with customers. 

What should a banking chatbot look like?

For banking chatbots to deliver the benefits above, they need to have the following characteristics:

1.  Conversational

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 banks shouldn’t settle for these rudimentary interactions because customers sure won’t. 

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 experience. 

2.  Transactional

Cost savings are just one benefit that chatbots offer banks. But their impact on bottom lines is substantial. They can (and should) increase revenue, too. 

Typically, customers only use a fraction of a bank’s products or services. A chatbot can act as a personal sales rep, suggesting the most relevant financial products to every customer based on hard data. 

They can even streamline the application process to improve sign-up rates. 

3. On-brand

Banks should provide customers with a seamless experience. That’s true regardless of whether they’re accessing services from a physical branch, mobile banking apps, or a banking chatbot. 

To that end, your chatbot software should be customizable. Align your bank’s branding, language, and messaging guidelines with the chatbot. This makes it an extension of the branding and customer service guidelines you’ve implemented. 

4. Secure

Banks safeguard customer assets, which means they can’t afford a single security slip-up. Any weak spot in customer-facing applications could be disastrous. Chatbots are no different. Since even the best chatbots increase the attack surface for banks, they must comply with strict security regulations. 

For instance,Freshworks chatbot has a multi-tier data security model and end-to-end security for exactly this reason. It’s GDPR and ISO 27001 compliant, meaning it keeps conversations private and secure. 

5. Multichannel

Your banking chatbot must be accessible to customers across multiple mediums, including smartphones, the web, and messaging apps like WhatsApp. Customers use many different platforms to access banking services, so you need to meet them where they are.  

6. Informative

The answers given by your bank chatbot need to be complete and informativethere must be value in every answer it provides customers. 

That means answering the customer’s questions in complete sentences and providing actionable insights to move them toward resolution. 

A chatbot should become a workable alternative to human support agents. But that can only happen if it’s effective. If it creates more questions than answers, it accomplishes nothing and contributes to a poor customer experience.

7. Connected to different departments

Escalation should be seamless for a chatbot. That means when customer issues are too much for the AI to handle, it should be able to send the customer along to a human support agent. 

But not just any representative — your chatbot must be able to forward a customer to the correct agent with no issues. Ensure it’s properly connected to each department so your customers can get the help they need as quickly as possible. 

8. Integrated with existing software

Your chatbot should integrate with the banking business’ existing tech stack. That means it should be able to access systems like a banking CRM, a customer support database, and a knowledge base.

With an integrated tech stack, customers and employees can have an easier time getting information and taking advantage of a seamless, efficient system. 

9. Gather analytic data

The chatbot you choose should do more than just relay information to customers. It should gather information on every interaction and compile it into reports for you to review. 

These customer interactions are a golden opportunity for behavioral data mining. 

The AI system should be able to identify trends that point to what your customers want, how happy they are with what they’re getting, and what they might want in the future. These chatbot analytics can inform future marketing plans, giving you a leg up on your banking competitors. 

10. Learn from each interaction 

Your chatbot should run on AI and machine learning — meaning, it should learn and become smarter after each customer interaction. 

By speaking with customers and analyzing the results of each exchange, the system learns and adapts, becoming more effective over time. That’s the major benefit of using AI chatbots for banking instead of an automated chat system. 

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 How chatbots solve common banking pain points

Banks and financial institutions use automated chatbots to resolve common customer pain points. With the help of these

AI-driven solutions, customers have faster, more accessible, and more convenient banking experiences.

Here are just a few of the common banking pain points a quality AI chatbot can help alleviate:

Long hold times

A common complaint among banking customers is excessive phone support hold times. When trying to resolve an issue concerning finances, customers feel on edge sitting on hold for long periods.

Thankfully, AI chatbots offer banking customers instant support 24/7. By having customers turn to an online chatbot first, ‌phone lines for human support representatives free up exponentially. 

Now customers calling in might wait five minutes or less instead of 20 minutes or more. This also takes a lot of pressure off human support reps, lightening their workload and giving them more time to focus on important customer issues. 

Common questions

A common reason banking phone lines become inundated with calls is that customers call in seeking answers to common questions.

These could be questions about an account balance, opening a new account, reviewing transactions, or other simplistic matters. This can quickly fill up a support representative’s day. But thankfully, this is where AI chatbots excel. 

These smart-systems can field these common issues, providing information and self-service resources to customers so they never have to pick up the phone. This ultimately reserves phone support time for more complicated or dire issues. 

Looking for updates

Financial issues can rattle anyone’s nerves. Issues concerning fraud, payment clearing, and refunds can take several days to process. It’s common for customers to want regular updates on these matters, and chatbots in banking can help. 

Instead of calling in frequently looking for updates, customers can check in with the chatbot on open support tickets. The bot can instantly look up the most recent information and provide it, answering questions along the way. 

This gives banking customers peace of mind and can quickly de-escalate situations before they have time to fester into something much worse.

How a banking chatbot can benefit your business

AI banking chatbots offer multiple benefits to financial institutions when used as virtual assistants. Here are some of the major ways your banking business can benefit from installing a quality AI-enabled chatbot:

Automated, round-the-clock support 

Most banks can’t offer 24/7 customer support. While your support reps can’t be available to your banking customers 24/7, your banking chatbot can. Night or day, customers can use AI chatbots for banking to resolve a wide range of banking customer queries. 

A personalized customer experience 

Personalized experiences are no longer a luxury. A whopping 71% of consumers expect personalized interactions, and 76% of consumers get frustrated when they don’t occur. 

Chatbots can easily deliver that personalized experience audiences crave. 

If having a successful conversation with a chatbot isn’t personal enough, it can leverage back-end data to provide personalized service to customers. Chatbots can provide customers with bank balances, check account information, and even make personalized product recommendations based on the customer’s unique financial situation.

Self-service 

Before smartphones, most banking queries required a human customer support agent. That meant customers had to waste time in lengthy queues to speak to a teller in person or sit on hold. 

In modern times, 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 can free 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 can save banks $7.3 billion in operational costs by 2023, up from $209 million in 2019. 

For instance, a Freshworks 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?” 

A human agent would require at least three minutes to answer that question. With Freshworks, the bot completed the request within mere seconds.

 A better understanding of customers 

Most banks don’t know their customers. In a study by Accenture, just 30% were very confident they could sense their customers’ emotional outlook about their finances without directly asking them. 

Chatbots can change this. 

Over thousands of conversations, chatbots can collect customer data. They can then use this information 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 through machine learning.

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Best practices for implementation and ongoing management

When implementing an AI chatbot for your company, there are a few things to keep top of mind. The following best practices can come in handy for the initial rollout and ongoing management of banking AI chatbot services.

Understand your banking customers

Before you can choose a quality banking chatbot, you first need to understand your audience. Financial institutions serve a wide variety of customers, and they all want different things. It’s up to you to dive into that audience and segment them into easy-to-understand groups. 

Once you’ve done that, it’s a simple matter to create marketing and support plans for each.

One aspect of that plan is the chatbot you choose. By knowing what your audience wants, expects, and needs, you’ll be able to easily understand which features your AI chatbots for banking should have. 

Gather a wealth of demographic information and continue to track their wants and needs as they shift over time. The chatbot you choose should be able to help with this. It can gather information on audience segments with each interaction once it rolls out. 

Program your chatbot to adhere to your brand voice

Users program chatbot personalities. It’s sort of like training a new support representative — except you have 100% control over what the result will be. 

The chatbot should be an extension of a financial brand. It should reflect the same values and tone you display throughout your website, physical locations, phone support, and other marketing channels you use.

As a financial institution, you don’t want to program your chatbot with a lax or overly familiar personality. Instead, make it knowledgeable and authoritative — it should inspire confidence in the people who trust you with their assets. 

Before rolling the bot out, put it through its paces with a series of mock interactions. Try to showcase a wide variety of customer behaviors when interacting with your bot to see how it’ll handle the real thing. If you don’t like what you see, adjust its responses and personality as you see fit. By the time your bot goes live, it should already be well-tested. 

It’s also possible to use chatbot templates for easy setup.

Review information regularly

Your AI solution can gather customer data from each interaction. This includes any trends that might be popping up through audience segments. The software compiles this data for you into a report. 

Make it a point to review that report regularly and look for anything out of the ordinary. Your system should also offer predictive analysis, which can help you anticipate customer needs and adapt pre-emptively to shifts in the industry. 

Make changes as needed

As customers interact with your chatbot, send out surveys to gauge their reactions to the experience. Make careful note of what they’re saying. If there are issues, be flexible enough to address them. 

Change your chatbot as needed to reflect the needs and reactions of your target audience. It’s the only way to improve the experience in a way that’s almost guaranteed to resonate with customers. 

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Use cases of chatbots in banking

Banks can pick and choose from the following use cases for their chatbots. Get inspired by these five common banking chatbot examples.

1. Assist with essential banking activities

With AI chatbots for banking, 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 financial activities, like spending ‌habits, monthly bills, or account balance requests.

2. Answer FAQs

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.

3. Provide proactive support 

Banking customer service chatbots don’t just offer support when customers ask. They can take a proactive role in customer service, sending payment reminders to customers, giving them updates on their credit scores, and asking customers if they need assistance after spending time on your bank's website. 

These push alerts elevate the customer experience and help deliver the personalized service that customers now expect from apps.  

4. Help customers apply for financial products

As discussed above, you can use chatbots as 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. 

5. Resolve suspicious activity

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 early warning signs. 

A chatbot can alert customers immediately whenever there’s 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 go out as soon as suspicious activity occurs.

Freshworks chatbot - Essential features for your business needs

Banks and financial institutions can make excellent use of Freshworks’ suite of chatbot builder services to bring quality financial support to customers. The conversational AI intelligence it offers can interact with customers like a human support agent. 

The system learns with each interaction, getting smarter and more effective over time. Additionally, the high-end data privacy features offered through Freshworks will keep conversations private and sensitive information secure. With end-to-end encryption, it is both GDPR and ISO 27001 compliant. 

You’ll also be able to serve customers globally, thanks to Freshworks’ multi-lingual support options in over 33 different languages. 

Banking customers will be able to communicate with you from the platform of their choice, thanks to Freshworks’ integration feature. It covers a wealth of mobile, web, and messaging apps. 

That means you’ll be able to meet customers on their turf, so to speak, and provide efficient and convenient service. There’s even a live translation function that human agents can use to understand customer queries and respond in the proper language. 

Plus, with Freshworks’ real-time dashboard, you can compile reports on customer behavior, reviewing metrics for future customer experience enhancements.

See for yourself why customers rave about Freshworks’ intuitive, powerful chatbot software

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The future of chatbots in banking

As cyber criminals grow more bold and advanced, banks will turn to the power of AI systems, like chatbots, to protect customer interactions. They’ll help detect and combat cyber attacks in real time. 

Additionally, chatbots will help create a true omnichannel experience in the banking industry. This will provide a flawless transition from chatbot support to in-person and phone interactions with live agents. 

The AI systems will also continue with customer data farming, generating insight into behavioral shifts and industry trends before they take full effect. 

As AI becomes more advanced and efficient, there’s less pressure on live support reps than ever before. As the technology evolves, it will become the first and main point of contact for banking customers.

Why Freshworks Customer Service Suite?

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 various financial products. 

Finding the right chatbot tool is key to unlocking these benefits and use cases. 

Freshworks is the perfect platform to build a chatbot thanks to:

  • Conversational AI intelligence

  • Leading data privacy and security features

  • Multilingual capabilities

  • Integration with web, mobile, and messaging apps

FAQs

How do banking chatbots work?

AI chatbots for banking work off of conversational AI systems that can infer the purpose of a customer's query and respond instantly with a fully personalized experience. The chatbot can handle simple issues and forward more advanced problems to human agents.

What benefits do banking chatbots offer to customers?

Banking customer service chatbots offer customers enhanced security, a personalized banking experience, 24/7 support, multilingual support options, multichannel communication, and more.

Are banking chatbots secure?

AI banking chatbot can be incredibly secure. Freshworks uses end-to-end secure encryption to protect customer information. The system is both GDPR and ISO 27001 compliant. 

Can AI banking chatbots handle complex financial transactions?

Chatbots for banking as of now can help with complex financial issues. This includes checking a balance, opening new accounts, reviewing transactions, transferring funds, overseeing investments, processing loan applications, and handling instances of fraud. 

How do banking chatbots integrate with existing banking systems?

AI chatbots for banking can interact with systems like a banking CRM or ERP to access customer information. This includes support ticket history, transactions, account information, and more. It helps the bot create a truly personalized experience in the blink of an eye.

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