Ever since the advent of cognitive computing and artificial intelligence, humans have always been keen about its usage and interested in how such technologies can be used to automate various operational aspects. Realizing their benefits, banking organizations across the globe have warmed up to them and are increasingly using them to drive a broader transformation of their services as a whole.
Of all the industries, a seemingly unassuming player is benefiting the most from chatbots and their integration. The paradigm of banking services has seen a massive revolution through technologies like ML and AI, thanks in large part due to the increased trust that the average customer has in them. In fact, 43% of customers prefer to solve their banking issues through a chatbot rather than going to the physical location of the bank’s branch.
Additionally, a report by Business Insider suggests that digital features are driving the banking industry as consumers are looking to assume financial control of their resources. In response to this behavior of consumers, 2017 saw banks spend $20.2 billion behind digital transformation efforts to drive user satisfaction as a whole. This only goes to show the potential chatbots hold in revolutionizing both the customer experience provided by banks and the industry as a whole. Here, we will look at a few ways through which chatbots will transform the banking industry in the times to come.
1. Enhance Customer Service
With improvements in NLP such as GPT-3, making it increasingly difficult to tell chatbots apart from human customer service representatives, customer service looks to have a field day in being able to resolve complex service requests without the need for human intervention. In fact, the benefits of these enhancements are enormous, with a study by Juniper Research showing that AI chatbots can save banks up to 4 minutes of time for every inquiry request, leading to cost savings of $0.50-0.70 per call.
Zenith Bank’s chatbot, ZenithDirect, is a great example of this. Deployed on their homepage, the chatbot assists users with any information they might need instantly. An interactive 24/7 solution, it services customer requests readily. The chatbot offers its services through menu-driven self-service, phone interactions, and social media platforms. The feature also serves as an educative resource, offering examples and definitions of industry-relevant terminologies and acronyms.
2. Accounting Bots
Apart from improving customer service indefinitely, chatbots can provide accounting & money management services to users and help them with financial decisions. Chatbots can apprise users of their balance, inform them about other account aspects like card bonus points and recurring payments, and keep them updated about their transfer and expense limits. Users can also ask chatbots for their account info should they want to make changes.
These AI bots are connected to a diverse information network that not only feeds them with user account information but also other relevant data like market status across the globe and financial liquidity levels. At the same time, accounting bots can also help users identify tap into a customer’s account, identify potential investment scenarios, or provide suitable financial suggestions that can help users manage their finances as well.
Accounting bots provide a very utilitarian use case today, especially for customer bases like millennials, by offering a simpler way of managing their finances. Take accounting bot, Cleo, for example. Cleo leverages machine learning to analyze your spending patterns. With the help of the data, it helps you decide which accounts should be managed by it. It also helps you budget and set up a Cleo wallet, a safe that helps you put your spare change aside every week.
3. Security and Compliance
In the banking industry, the functionality of chatbots extends beyond simply providing account information and customer service to the realm of security. More and more banks today are opting for chatbots and using biometric data like fingerprints or facial recognition technology to replace passwords and other forms of user verification to fortify security.
In fact, a study by Goode Intelligence predicts that almost 1.9 billion bank customers will utilize some form of biometric identification by the end of next year. Additionally, The Guardian announced that Halifax, a U.K. bank, even tried out Bluetooth wristbands that authenticated account access by identifying the client’s unique heartbeat.
With AI making inroads into facial recognition and other authentication techniques, chatbots are set to become more sophisticated and secure. Moreover, these bots also provide notifications as soon as suspicious activity occurs and prompts users to take immediate action. Chatbots can also offer instantaneous security status, as evident in the case of Kore.ai’s chatbot. The chatbot can intimate the customer in case an unauthorized payment was made and then ask the user on the next steps to be taken.
4. Ease of Data Management
Data management is one of the most promising applications of AI chatbots in banking. Chatbots are incredibly prolific at processing and parsing huge volumes of data and can automate automating high-end and low-value processes.
Users can ask chatbots to provide them with complete account visibility, including but not limited to transaction overview, spending reports on a timely basis, account balance, and other particulars to help themselves manage their finances better. AI chatbots can also send notifications as soon as a deposit, refund, or charge is deposited in the account.
5. Predictive Analytics Tool
For all of their brilliance, the most gainful attribute of AI chatbots is their ability to sift through huge amounts of data and recognize patterns that otherwise elude human eyes. This helps them conduct a predictive analysis of the user’s behavior and monitor their account continuously to observe if the behavior is suddenly offset or not.
Particularly useful for fraud prevention, chatbots can help users flag any abnormal behavior and prevent cybercrime before it even happens. Cybercrime already costs the global economy around $6 trillion. ML and artificial intelligence solutions are being increasingly integrated by banking and financial service providers across their platforms to identify fraud in real-time. This capacity of chatbots is so powerful that Mastercard was able to decrease decline rates for its users by 80% using AI chatbots.
The banking revolution is still in its nascent stages, but with the arrival of AI, it has undergone a landmark change. This not only eases user experience but also provides investors and digital startups with numerous opportunities for improvement. AI also offers a high-level understanding of the goals that the banking industry can achieve with AI, thus also providing them with food for thought about the other ways chatbots can be used to transform the banking industry for the better.