The events of 2020 led to a resurgence in interest in chatbots by large international enterprises in industries such as healthcare, cybersecurity, and finance. The banking sector has been especially prominent in the development of chatbot algorithms for the convenience of both B2C and B2B stakeholders.
Based on data, 45% of industry experts stated that robo-advisors, or chatbots, will have a huge impact on the future of banking. 58% of US citizens stated that they will use robo-advisors regularly by 2025, prompting the banking sector to adapt to expectations. Let’s take a look at the importance of chatbots in banking and real-world applications of the technology in 2021.
Perks of Introducing Chatbots to the Banking Sector
The finance industry is vastly different today compared to only a decade ago. According to statistics, 89% of people use mobile banking, with 91% of Gen X and 79% of baby boomers also relying on it daily. Traditional banking institutions have outgrown their previous roles and now serve as cloud-based blockchain services for people to make use of remotely.
Research indicates that 40% of millennials have changed banks due to poor servicing, with 44% who would rather communicate with a chatbot than a person. In such an environment, the role of real-world customer support agents and bank representatives has also been altered, making way for chatbot AI. By introducing chatbots as a means to manage support tickets and engage clients, banks can enjoy several important benefits:
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24/7 customer servicing in various languages
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Marketing personalization based on client’s history
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Ability to gauge client satisfaction metrics
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Staff onboarding and training opportunities
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Access to a wide range of chatbot interaction data
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The ability for staff to address critical tickets while chatbots handle minor ones
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Streamlined back-end workflow thanks to chatbot customer support coverage
Types of Chatbots Found in the Banking Sector
The application of chatbot AI in the banking sector can differ depending on the situation. Thanks to machine learning, chatbots can learn from experience and become more efficient at handling support tickets. Each financial institution or bank can identify which areas need to be managed by chatbots and which by real-world staff based on their specific needs. As such, we can identify several different chatbots which the banking sector can make good use of:
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Virtual Agent
The virtual agent chatbot represents the most comprehensive chatbot AI which can be found in the banking sector. Its role is to make the client feel as if they were talking to an actual person on the other end. This level of sophistication requires extensive set-up time, but it can pay off substantially for the financial institution. Virtual agent chatbots can mimic human intelligence, manage more comprehensive dialogue, as well as pull data from security records to help solve support tickets quickly.
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Virtual Assistant
The second most intelligent type of chatbot is the virtual assistant. Given its namesake, a virtual assistant chatbot can “assist” clients in booking appointments and solving issues such as forgotten passwords or bank account checkups. Virtual assistants are not as advanced as virtual agents, and clients will know the difference after a few queries. However, this shouldn’t stop financial institutions from making good use of virtual assistant chatbot AI.
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Chatbot for Frequently Asked Questions (FAQ)
The third and most basic type of chatbot for banking purposes is a chatbot meant for FAQ. FAQ represents a set of frequently asked questions that clients are most likely to present the support agent with. Questions in regards to which links to visit, how to change passwords, or where the nearest bank is are considered valid for FAQs. This chatbot is very useful for utility’s sake, but it won’t be able to intelligently respond by using available data to converse with clients. Regardless, its value in freeing up support agents’ and staff’s time is unprecedented.
Examples of Chatbots in the Banking Sector
Now that we’ve discussed the types of chatbots and their role in the banking sector, let’s take a look at real-world examples of the technology. These chatbots are already deployed, and financial institutions use them to make their clients’ experience as smooth as possible.
Bank of America’s Erica falls into the category of virtual assistant chatbots. Its purpose is to assist clients in making the best possible banking decisions through innovative voice-to-text features. Erica can notify clients via Bank of America’s smartphone app, provide scheduled updates and assist in monthly billing cycles. This is a fully personalized chatbot designed for seamless and user-friendly interaction for each of the bank’s many clients.
Ceba is a virtual agent-level chatbot designed by Commonwealth Bank to perform a plethora of different tasks for their clients. Everything from card activation, payment processing, and cardless cash payouts is available via Ceba through Commonwealth Bank’s app. The chatbot can understand over half a million voice queries directed at over 500 different activities related to the client’s account. Ceba is a secure way for people to interact with their bank accounts, thanks to the Commonwealth Bank’s inherent privacy and data safety regulations.
LeO falls into the category of virtual assistant chatbots, as it allows financial professionals to manage insurance contracts through its web-based UI. This chatbot is made to streamline the relationship between agents, brokers, and insurance holders through call scheduling, lead collection, and automated FAQ. It’s able to automate an array of tasks related to client relations, making the insurance contract process management faster and safer.
The Future of Chatbots in the Banking Sector (Conclusion)
Chatbots in the banking sector are slowly becoming an industry standard, prompting banks across the world to scramble and adjust accordingly. It represents the next logical step of evolution for the financial sector after mobile banking and cardless payments have become the norm. Only time will tell to what extent chatbots will be used in banking 5-10 years from now, but the technology is certainly here to stay.