Conversational AI in Banking and Finance

Staff WritersAccount-Based PlanningArtificial Intelligence (AI)Price Optimization & Revenue Management

By STS Staff Writer On Apr 21, 2023

The way we live and conduct business has changed significantly as a result of artificial intelligence, and this is also true of how banks and other financial institutions conduct their everyday business. Your bank can benefit from improved and conversational AI use cases, therefore, a comprehensive user experience might be helpful.

Just try to picture yourself in need of a passbook while there is a lengthy line of people waiting to get their passbooks updated at the bank. Who wants to visit a bank unnecessarily, Don’t you think it’s annoying? In the world we live in today, you can get everything done while lounging at home without having to move a muscle.

The largest call centers in the US are owned by insurance and financial firms including Wells Fargo, Citigroup, Bank of America, JPMorgan Chase & Co., American Express, and Fidelity Investments, which employ more than 3.3 million call center agents countrywide to provide consumers with the assistance they need.

However, there has been a change in how businesses are spending money on technology to cut back on customer service expenses and automate the majority of client requests. By 2023, conversational AI chatbots in banking will help save $7.3 billion in operating costs globally, according to Juniper Research.

What exactly is conversational AI, and how does it contribute to a better customer experience?

Customer service that is quick and available at the moment is desperately needed during a pandemic. While adjusting to the shifting consumer behavior brought on by the ongoing health crisis, many businesses and brands encountered numerous obstacles on a global scale. The time was right for technology to take over and simplify life for everyone. As a result, it is clear how internet communication is assisting customers with the pandemic.

In order to fully realize the potential of digital engagement, or to show how interaction analytics may reveal organizational blind spots to improve consumer experiences, it is true that digital channels are the key. Customers nowadays have numerous options for contacting brands.

They are using a variety of platforms, including texting and chat, to ask for support. In recent years, utilization of these two channels has significantly increased. By using Facebook Messenger or WhatsApp 110% more frequently in 2020 than in 2019, Statista reports that social messaging is the preferred method of communication for customers contacting businesses.

Emerging technologies, including bots, automation, chatbots, A.I., machine learning (ML), natural language processing (NLP), and analytics, were also used more frequently. Incorporating conversational AI, which is a key factor in improving the experiences of both customers and customer care representatives, was made possible by utilizing all of these technologies.

Today’s consumers expect brands to act quickly and conveniently in order to provide positive experiences. Real-time assistance from conversational A.I. can help brands reinvent their customer service. The capabilities of conversational AI are enhanced by data and analytics, improving CX. By personalizing interactions, you may make the process feel less mechanical and scripted by analyzing data from previous contacts.

Conversational AI in Banking and Finance:

According to Analytics Insight, the global artificial intelligence market for the banking sector is expected to generate $48,3 billion in sales by 2025.Conversational AI in banking enables the transition from a manual, operationally intensive service delivery model to a smart one focused on self-service options that increase client satisfaction.

The adoption of conversational AI by banks allows them to reclaim their rightful place at the center of their customers’ financial well-being and radically alter interaction paradigms.The conversational AI benefits in the banking sector are many, but here are a few mentioned below. Let’s see how chatbots can help the banking sector:

1. offers more reach than an application:

It is simpler to give support and nurture leads with a chatbot than with an application since it can operate on the various channels that your consumers employ. Chatbots allow you to meet clients where they are and on time by integrating with voice assistants such as Sir, Alexa, and Google Assistant, as well as social media platforms such as Facebook Messenger and WhatsApp.

2. A quick, easy-to-use interface

Chatbots let customers interact with businesses invisibly and rapidly in a tailored, intuitive way by imitating human interaction patterns and learning from each contact they communicate with. Another priority is speed. When compared to a chatbot’s almost instantaneous responses, the waiting time on hold with a customer support representative is tedious. So, people prefer chatbots.

3. Sales and lead development

The best approach to finding warm leads is through chatbots. This is so that a chatbot, as opposed to a human salesperson, may access various client touch points across the omnichannel buying journey. Additionally, chatbots are equipped with a bank of client insights that can be analyzed at breakneck speed. As a result, they are perfectly suited to the task of sifting through a large number of potential clients through the sales funnel.

Conversational AI in banking aids in the understanding and resolution of customer queries by automating repetitive tasks that would otherwise take a bank employee a long time to complete.Better efficiency and quick resolutions improve your credibility, which is important for the banking space.

The market value of BFSI enterprises across the globe is soaring because of AI. By 2035, according to Accenture, the financial services sector would gain from AI solutions to the tune of over $1 billion.

Artificial intelligence, it is obvious, has the potential to significantly impact the banking industry by lowering operational costs, automating procedures, and enhancing the overall banking experience for customers. Service quality has significantly increased as a result of the growing use of conversational AI in banking.

Top Conversational AI Use Cases in Banking and Finance:

A report on banking by Business Wire suggests that banking will be one of the two industries that will be spending the most on AI solutions by 2024. Most of the processes in banking follow a process to completion, and AI likes to follow that routine. Some use cases of conversational AI in banking are given below:

Chatbot Use Cases Banking #1 – Checking account and card balances

One significant advantage that chatbots provide is the ability to resolve various types of issues and answer questions in one location, 24 hours a day, seven days a week.With the use of a banking chatbot, banks can handle more personalized requests. An AI-powered chatbot requests user verification, and then after this, all the information is available. Checking account or card balances is a top user request because 36% of Americans check the balance daily.

Chatbot Use Cases for Banking #2 – Payment Due Date Questions:

In terms of bills, loans, or credit cards, banking chatbots can respond to inquiries about payment deadlines. In the first quarter of 2022, the FRS reports that the default rate for consumer loans increased to 1.73%. Therefore, if monthly payments are automated and additional services are offered through alternative channels, this number can also be reduced. The AI banking chatbots are able to alert consumers in advance of the due dates so they can be reminded to make the payment.

It might be challenging to balance your budget and make sure all of your payments are made on time considering the hectic schedules of Americans. Conversational AI provides customers with payment reminders, responds to their inquiries about the payment due date, and also carries out payment actions upon their request. As customers comprehend their balances and follow instructions, chatbots can assist them in paying their bills by using previously saved payment options. Customers don’t have to worry about anything because they may also have automated payments set up for them.

Chatbot Use Cases Banking #3: Making a payment like a loan or credit card

In order to help users manage their payment options and be directed through the payment process, conversational AI assistants integrate with bank backend systems. Due to a chatbot’s agility, quickness, and capacity for performing a variety of activities and actions, these conversational experiences may actually be faster than a user making a payment through the phone, website, or even an app.

Chatbot Use Cases Banking #4 – Transferring Funds Between Accounts

With the aid of an AI banking chatbot, money transfers between accounts may be made while thwarting fraud and cyberattacks. By 2021, debit and credit card fraud crimes will have increased the number of victims in the United States to 127 million. In the banking industry and in all of finance, fraud prevention is crucial, and chatbots have great potential to spot fraud.

To confirm that the user is not a robot and to track the user’s position in real time so that the transaction history can be reviewed, a finance chatbot can ask the user questions based on the context. A chatbot can ask the user some questions from the prior context right away if these factors are novel, allowing it to verify that the user is the intended one. In some circumstances, escalation to a live agent may be necessary in order to confirm that the user is who they claim to be if there are any doubts.

Chatbot Use Cases: Banking #5 Report a lost or stolen card

Customers should take quick steps to freeze or lock their credit cards in the event they lose the card or it gets stolen. The customer will need to locate the credit card company’s phone number and dial it in order to continue with this.

The ideal option for the consumer, however, is not to wait on a long list for a live agent to become available. This is where an AI banking chatbot may help. The user may report their stolen or lost card, see if there is still money in the account, and then physically look for a card.

Chatbot Use Cases for Banking #6: Ask about recent charges on a card or account.

They can track recent transactions and costs, which is an additional advantage of these virtual assistants for banking. Customers can also ask the bots about their most recent spending habits, and they are eager to respond. According to CNBC, 42% of Americans are unaware that they are still paying for a subscription they no longer use. These chatbots can respond to inquiries regarding subscription fees or provide a user’s high-spending categories.

Chatbot Use Cases Banking #7 Creating leads and Acquiring customers

When interaction is a factor, chatbots are unbeatable. They might engage with clients for the first time and comprehend the motivations behind their demands and sentiments.

In addition to gaining new clients and their personal information, this extremely human interaction can aid banks in expanding their clientele. After that, the sales staff receives these details to continue the dialogue.

Conversational banking can alter clients’ viewpoints when there is real-time contact. As a result, banks may be able to effectively hit the mark and produce a service opportunity.

Top global banks that are utilizing conversational AI:

1. Ally Assist from Ally Bank

One of the first banks to introduce a chatbot, Ally Bank released Ally Assist in 2015 in an effort to give customers seamless, tailored customer care for handling their accounts. Ally Assist can be used to pay bills, transfer money, and get account information through the Ally Bank iPhone app. The bank has introduced an Ally Skill on Amazon’s Alexa platform that enables users to do basic financial operations using voice commands.

By examining accounts and transactions to generate pertinent support topics and messaging, Ally Assist may anticipate consumer demands through machine learning.

Takeaway: The Ally Assist is useful because it helps the customers handle the accounts appropriately. It helps to perform many things like making payments, transferring money, etc., so when preparing a banking chatbot, one should take care of the needs of the customers so the chatbot can meet the desired expectations of banking customers and give them precise solutions that will win their loyalty.

2. The virtual assistant chatbot from HSBC

On numerous product pages on the bank’s website, Amy is accessible. Amy assists consumers in getting quick answers to frequent queries about the bank’s products and services because she is fluent in English, traditional Chinese, and simplified Chinese.

Takeaway: Amy is multilingual, it is advantageous for a bank that operates internationally to use a conversational AI chatbot that can serve customers in a variety of languages. Any issue a consumer is looking for a solution to can have a personalized touch added to it, making them feel special. This maintains the client’s loyalty to the bank and expedites the resolution of any concerns.

3. Citi Bot SG from Citi

Customers can inquire about basic account information over Facebook Messenger using Citi Bank’s Citi Bot SG chatbot. Customers can get responses to their inquiries about account balances, transactions, rewards, and payment details for credit cards, checking accounts, and savings accounts.

Takeaway: In order to provide clients with speedier responses and individualized care, conversational AI chatbots are able to handle financial services and efficiently carry out tasks that used to be done by humans. This way, the workload is shared and customers do not have to wait in the long queue on a customer service line for simple transactions. Most of the work is done by the chatbot, so managing customers and giving them satisfactory responses is possible with a chatbot like Citi Bot.

4. ENO from Capital One

Eno, a digital assistant from Capital One, is accessible via SMS, the bank’s mobile app, and the bank’s website. Eno employs sophisticated natural language processing to recognize 2,200 possible ways to inquire about a balance. Eno also takes the initiative to get in touch if a bill is larger than usual, if it suspects fraud, or if it notices an unusually high tip. Monitoring free trials to notify users when they are about to expire is another distinctive function.

Takeaway: Using a chatbot like ENO can help banks manage their day to serve properly, and ENO has over 2000 ways to inquire about a balance, so if the customer’s account is experiencing any fraudulent issues, it can quickly highlight them and inform the customer about the same so necessary steps can be taken.Other important information about the account can also be conveyed quickly to a customer, which keeps them free of stress and allows them to be a loyal customer of the bank. So, helping customers in a thousand different ways is what should be the focus when creating a conversational AI for your bank.

5. Erica from Bank Of America

The BofA app includes a virtual financial assistant named Erica that may aid users with money management. Erica delivers credit scores, refund confirmations, spending summaries, reward and account balances, and expenditure summaries within the interactive interface. She is also capable of sending bill reminders and locating duplicate charges.

The capabilities of the AI-driven chatbot don’t end there: Erica provides Merrill, a division of BofA, clients with support by providing information on portfolio performance, trading, investment balances, quotes, and holdings.

Erica assisted more than 5 million users in 2020 in completing more than 75 million requests. Over 175 million inquiries have been answered by Erica since its inception in 2020, assisting 15 million users. Erica interacts with people in almost 400,000 different ways each day.

Takeaway: Erica has a capability to handle so many customers, so similarly, when you are planning for a conversational AI for a bank, it should be able to handle millions of customers and assist them with all the queries like account balances, sending payment reminders, and more. The bot is also able to interact with customers in 400,000 different ways, so keeping this in mind, a versatile bot with important and helpful features should be created.

How is conversational AI strengthening customer support in BFSI?

Beyond simply providing a quicker response to queries, conversational AI has revolutionized customer care in a variety of ways by saving customers’ time and promoting higher customer retention.

The BFSI sector is not spared from the growing popularity of conversational AI, which has spread across all industries. 80% of businesses utilize chatbots or conversational AI platforms in some capacity, according to a Business Insider study. A staggering 90% of all incoming inquiries at banks appear to be automatable by these AI-powered chatbots.

Conversational AI in the BFSI sector is a useful digital tool that helps businesses and customers keep clients. The main benefit it provides is that brands can be confident that their customers will receive precise and correct responses to all of their questions. It also allows for quick resolutions for customers. The banking and financial services sector, which depends heavily on this, and deals with the finances of the users.

1. You don’t need to worry about the FAQs

There are a number of questions that are frequently posed in the BFSI sector. What, for example, is the balance in my account? What credit am I eligible for? When is my insurance payment due? A conversational AI is capable of providing prompt and correct responses to each of these questions.

2. Make transactions and payment:

Additionally, it can step things up by allowing users to pay for products and keep track of all their transactions. For instance, they would be able to inform consumers of the due date for the premium or the total amount owing, in addition to providing customers with the option to pay there and then. The majority of people find switching platforms cumbersome, but with an omnichannel chatbot, clients can make payments immediately and without any delays.

3. You can cross sell and upsell using a personal touch

A lot of personalization is available in the BFSI sector. Each user is distinct and will have their own set of needs. Conversational AI is able to comprehend the wants of the clients and provide them with particular solutions based on their prior data. This may result in increased revenues for the brands and higher conversion rates.

4. Fraud management:

If the AI platform is intelligent, it can assist in analyzing trends and patterns to alert in cases and see abnormalities so that the wrong activity can be addressed and the damage is minimized in the time frame.The bot can quickly identify the problem and offer a quick solution.

5. Feedback Mechanism:

It can also serve as a useful tool for gathering ideas and comments. At each stage of the customer journey, it aids brands in measuring the experience of the consumer.

Many BFSI companies are converting to conversational AI platforms. Another indirect benefit is that with AI adoption, the market value of BFSI enterprises can grow steadily on a worldwide scale. According to a survey by Accenture, using AI-based solutions can help the BFSI sector add more than $1 billion in value by 2035.

The conversational AI was a boon during the pandemic.

The year 2019 saw the end of the planet! The majority of organizations had to temporarily cease operations in order to stop the spread of COVID-19, which had an effect on enterprises all around the world.

Even though banks were permitted to operate, many were reluctant to go outside for their routine banking needs. Consumers were able to acquire the assistance they required thanks to conversational AI during these historic periods. It was 24 hours a day, personalized, quick, smart, and convenient in addition to all of those other qualities.

Conversational AIs supported the delivery of timely service and great customer service for the insurance and finance sectors as well. In the BFSI sector, chatbot usage has increased in this post-pandemic phase as a result of all of this.

Conversational AI and IVRs

Conversational AI is improving over time, and the trends also showcase that voice based systems will be soon replaced by it. Though conversational AI and voice based systems are compared quite often, these are different The majority of BFSI brands currently use convoluted, slow, and challenging to navigate IVR systems.

So Voice AI will not just be a welcome shift; it will also help in mapping the emotions of the users and the urgency of speech. To determine the appropriate user context and reactions, the conversational AIs will receive training in emotion and sentiment analysis.

So, in case the user calls to report the loss of a card, the urgency of the matter will be recognized quickly, and the card will be blocked immediately. The AI will also offer sympathy to the user, and the whole process will be so quick that the user will not have to wait for the IVR to transfer the call to a live executive

A clever voice banking bot may converse with people in a manner similar to that of a live representative and guide them to appropriate solutions. This is precisely where a fundamental IVR is lacking.This gives agents more time and space to concentrate on more challenging queries. The BFSI sector can be significantly impacted by AI. It can streamline operations, automate procedures, and improve the overall customer experience.

Conversational AI in Banking: A Practical Digital Tool for Banks and Their Clients

Conversational AI in the banking environment is advantageous for both the bank and the clients. While conversational AI chatbots quickly resolve consumer issues, banks can be confident in the precision and correctness of the automated solutions, which is a crucial factor for the banking and financial services sector, that deals with the funds of users. Automated processes eliminate human mistakes and increase customer retention.

Your conversational AI chatbot can change the way that banking is done, from engaging clients around the clock to assisting in providing outstanding experiences. These virtual assistants are very helpful for customers, and banks can execute smooth operations, so the growth of conversational AI is also very promising in the coming future.

**The primary author of this article is our contractual staff writer – Sakshi John.