Sweet talking: how chatbots help banks become smarter

Cathal McGloin, CEO of ServisBOT


Traditional banks are under pressure from increasing regulation and challenger banks. This has led to a sharper focus on unit economics and the increasing application of artificial intelligence and automation technologies that lower service costs while still meeting customers’ needs.

Chatbots: The new voice of banking has arrived


To maintain customer service levels while reducing service costs, an army of chatbots are offering game-changing opportunities for financial institutions to transform how they engage with customers across all touch points in their financial interactions. Whether it’s a request to provide a customer with the balance on their account or activate a newly-issued credit card; acquiring new customers by bringing them through a smooth application and approval process, or promoting new banking products and loyalty programs, chatbots can handle a multitude of customer interactions.

New channels of communication, enabled by social messaging platforms, voice-activated assistants, and mobile devices, have created new and exciting possibilities that are increasingly centered on conversations.  Powered by Natural Language Processing (NLP) and artificial intelligence (AI) technology, automated customer interactions now enable human-like chat and fluid conversations.

For the consumer, smart chatbots bring greater convenience, lower friction, and increased accessibility for their banking needs. For banks and other financial service providers, it brings a new wave of innovation centered around customer conversations.  Now, financial institutions can literally have a voice and deliver their services to customers in more convenient and automated ways, across multiple touchpoints and communication channels.

Chatbots: evolving toward conversational AI

Intelligent banking chatbots can interpret customer intent, understand exactly what they want, elicit any additional information needed, and execute the necessary tasks, all in a single seamless chat. Rather than limiting customers to pre-defined banking processes, departmental siloes, structured forms and menus, cluttered websites, and contact centre availability, a single automated conversation can trigger the tasks that are needed to fulfill the customer’s need. This is what is commonly termed as Conversational AI.

Banking bots help streamline and automate customer-facing processes, lowering the cost of service delivery. Take, for example the simple task of authorising and activating a customer’s newly-issued credit card. A chatbot could be used to replace the call to the contact centre, getting the card activated quickly and easily and without the need for human agent intervention.

In addition to using bots simply to further automate specific tasks and make them available 24/7, there are far-reaching opportunities to use conversational AI to transform customer engagement across the banking organisation. By allowing the automated conversation flow to call on different business processes, the customer can move across various service channels to fulfill their financial service needs.

For example, a customer may request their bank balance by voice over Siri, or Amazon Alexa. The account bot can move the conversation to the customer’s preferred messaging channel, sending them their statement balance. This chat could then call on other bots to send a reminder on the upcoming credit card payment, promote a new product or offer, or to ask the customer if they have any other banking need.

Since conversations are more fluid and less structured they lend themselves to more versatile engagement. They also remove a lot of the friction that frustrates customers when they are trying to complete multiple tasks by enabling this in a single conversational session.

A new way of working

Speaking in a recent television interview, Monzo CEO, Tom Blomfield, reported that, while traditional banks are investing £150 per customer per year to maintain each customer account, his challenger bank can service an account for a tenth of that.

Using a range of customer interaction channels has been key to this cost reduction. Monzo uses a combination of in-app chat, social media, browser-based FAQs and traditional call centre agents, to help customers to find answers in the most customer-friendly and cost-efficient way.

Writing in Monzo’s annual report, Blomfield wrote, “We’ve also been able to make savings by helping our customer support team become more efficient. Together, this has helped us lower the cost per account to around £15.

About £10 of this cost goes towards providing fast, friendly support: the team who speak to our customers and solve their problems every day, in-app, over the phone and on social media. We see that £10 as an investment that lets us provide an effective, delightful service that’s reflected in a Net Promoter Score of almost +80.”

With banks under increasing pressure from new and agile competitors and a more demanding and tech-savvy generation of banking customers, creating superior experiences is a must. Chat, combined with the power of AI, is the key.

Chatbots: go beyond the contact centre

There are multiple ways in which chatbots can transform customer-facing interactions in the banking industry. They can be used to automate tasks to assist with most customers’ financial service interactions. However, chatbots can be extended beyond contact centres to encompass any other operational area involving customer interaction.

Within financial operations, any process that is customer-facing, whether approving a customer for a credit card, fraud prevention, or credit management, are all potential use cases for bots. JPMorgan Chase uses chatbots to streamline back-office operations. Its contract intelligence software, COIN, scans commercial agreements and has saved more than 360,000 hours of employee time. The chatbot also assists employees with regular IT requests such as resetting passwords.

For credit card providers, collections management is an important operational issue to reduce the number of delinquent accounts and bad debts that impact cash flow. However, connecting with customers often proves difficult when arranging collections. This situation is exacerbated by reduced engagement levels via phone.

A collections bot can proactively contact late payers at convenient times via messaging, which has measurably higher engagement rates. The bot can make it easy for customers to make a payment within a single chat session and can guide the customer to enrol in payment programmes, such as autopay or prepaid cards. A collections bot can also take the necessary actions to reduce a credit limit or suspend the card and can send multiple reminders to ensure that payment is made, without increasing service costs to the credit card provider.

Banking chatbot use cases, both inbound and outbound, can be tailored to customer segments, by geography, and by operational department. Conversational AI can transform how banks engage with customers, not just in single siloed transactions but in more fluid and flexible ways that can make banks more competitive and build their brand identity.

Chatbots: a banking ambassador for customer loyalty

From the early days of print and telephone to the emergence of the internet and online banking, financial institutions have engaged with their customers using a range of communication channels. Conversational AI represents one of the biggest shifts in user interfaces since the introduction of the ATM forty years ago.

To meet the needs of millennial customers, banks need to up the ante on convenience, trust, and personalization, applying the latest technology to attract and retain this growing customer segment. Wells Fargo uses a chatbot to allow customers to check their latest transactions over Facebook Messenger. Using technology to pre-empt questions, Monzo reduced the number of customers that needed to get in touch with its contact centre by 33 per centin three months.

Voice-activated interfaces including Siri, Echo, Cortana and Google Home and message-based interfaces such as SMS, Facebook Messenger and WhatsApp, are increasingly shaping how banks engage with these customers and create brand loyalty through smart conversations. By keeping the conversation flowing, AI can help banks maintain the vital balance of keeping customers happy while managing costs.”



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