3 min read
A month back we wrote a blog post about why chatbots were emerging as the next big technology trend and how they were important for your business. Today we will discuss how chatbots, specifically in banking and finance, are making a huge impact.
A quick recap - what are chatbots? Chatbots are software programs, which back in 2013-2014 sounded like fantasy. These software programs leverage Natural Language Processing and respond to voice commands or specific text instructions. They are set up to look for pieces of information shared by a user (through text or voice) and provide an answer if their logic is built to support the command.
Banking and financial institutions are a conservative field and they have only just started taking advantage of technological innovations in their daily functionings. But this is one field where these innovations can save costs, improve efficiency and increase consumer happiness quotient. Owing to this, financial chatbots are the newest trend - with AI driven software designed to carry out various tasks and respond to user requests through different means (think Facebook Messenger, Skype etc). With the advances in Machine Learning, these bots are becoming intelligent enough to understand the user’s intent and respond in a more “human” manner.
Chatbots can now allow 24/7 customer service on simple matters, initiating fund transfers, set up recurring payments, check bank statements and figure out a customer’s spending habits among other things. The day is not far where these chatbots would become full-fledged financial advisors which will not only help customers make informed decisions, but also help them improve their financial planning. This is also why we there is an increase in the number of fintech companies coming up.
Here's some reasons chatbots are coming up in the financial industry in a big way.
1. 24/7 Customer service
This is the primary use case of chatbots. Customers call banks and financial institutions for all sorts of reasons, and not all of them need manual intervention. These institutions spend fortunes to maintain their call centers and support departments - for various tasks from customer KYC, to resolving consumer queries and informing them about new products.
Some mention that security is a concern when letting a chatbot talk to a customer. But the same verification protocols which are used by a call center representative to discern a customer identity can be leveraged by a chatbot.
Implementing a chatbot for customer service can reduce spendings by nearly fourteen times, which is huge.
2. Ease of use for customers
Contacting a bank or financial institution over the web means different authorization sequences, complicated interfaces and the requirement of entering personal information multiple times. With chatbots, these bothersome practices can be reduced.
A user who is using a messaging app that is associated with their bank account no longer needs to type in credentials over and over again. This in turn makes it easy for customers to use your services - and ease of use always translates into loyalty and higher consumer engagement.
3. Automated data gathering
Chatbots are excellent tools for data capturing and analytics. Since they work with specific keywords, they can effectively capture a customer’s current needs and pain points. And they can do it independent of the medium of communication (website, mobile app, different OS versions).
With the data captured by chatbots, banks & financial institutions can also find out how satisfied a customer is with their service, how well specific product promotions work or how engaged users are with their services.
Automating tasks using chatbots can also help institutions gather some valuable information which can be fed into a centralized database and analyzed to provide important insights and action items to improve services, product offerings and customer satisfaction. This data can also be used to improve the chatbot’s abilities.
4. Test end-user engagement
In this day and age, most banks provide a wide array of services and products - loans, cards, financial planning services etc. But customers are not always aware of these offerings. Bots can be used to introduce new products and services to customers and even test the user’s interest level in specific products. If programmed smartly, they can also get a lot of competitive information. At the same time, since users are not dealing with a real person, the bot can easily be stopped with simple text commands.
This way, companies can promote products and solicit feedback using chatbots.
5. Millenials are comfortable with them
While this may not seem a lot, millennial are clients with vast buying powers - and their preferences cannot be ignored. Chatbots operate right from within their favorite messaging apps and thus open up a large consumer market to financial firms.
How NewGenApps can help
While ideas are great, if not executed well, they mean nothing. In theory, chatbots are very promising for banks and financial institutions. But if not implemented right, they can backfire and provide a sub-optimal experience to the end user.
There are many things that can go wrong with a chatbot implementation. If it does not respond to user queries as expected, that is bound to increase the incoming calls for the customer service center rather than reduce it.
Security is another area where chatbots in this field can go wrong if not implemented right. A person’s financial information is a very sensitive matter and can be put to risk if robust security measures are not employed. Touch ids, in-message authentication or other such tools must be implemented to ensure user authentication.
Training a bot is another crucial task. If a bot cannot look for and get the right keywords in a conversation and respond, the entire idea behind having a bot fails and it becomes frustrating.
At NewGenApps we’ve been working with chatbots across verticals and using various platforms. If you decide to launch a chatbot for your business and need our help, we’d be more than happy to help.
