Go beyond conversation apps to speak to banking customers

Over the past few years, digital banking has seen tremendous adoption with banking customers. While internet banking had been growing steadily since the early 2000, it’s the increase in smartphone penetration that has led to a dramatic increase in mobile banking. Statistics from the Federal Reserve suggest that 43% of all mobile phone owners with a bank account had used mobile banking in 2016, a jump of 10% over the previous two years1.

What this growth does not show, though, is that the relationship today is primarily transactional, with a majority of the customers using mobile banking for either viewing account balances, performing a transaction or receiving an alert. This clearly shows that the current use of digital channels has barely engaged customers. Banks haven’t been able to use digital channels effectively to move to a more influential and advisory role (advising on finances, products, expenses, life goals etc.). In fact, according to Gallup, between baby boomers, Generation X and the millennials, the percentage of fully engaged customers falls from 33% to 23%, and actively disengaged customers increase from 20% to 31%2. Obviously banks still have a lot to do if they want to actively engage these customers.

That said, the advent of chatbots has given banks an opportunity to do just that. These chatbots, when integrated with the banks existing digital channel solutions, help provide a means to reach out to their customer better and faster. So it shouldn’t come as a surprise that using conversational bots is garnering a lot of interest in digital banking.

Why conversational bots?

  • Conversation comes naturally to consumers

Conversation comes naturally to us and messaging apps provide a straight line of communication for opportunistic and personalized interactions. Consumers are already using messaging apps not just to communicate with people, but also to connect with brands. In fact, according to BI Intelligence, the top messaging apps have already surpassed the top social media apps in terms of users. No wonder it has been named the Natural User Interface (NUI) by many3.

  • App fatigue

The strategy of some banks to introduce a new app for every new feature (wallets, payments, loyalty, and advisory) means that there is a lot of clutter and fatigue in the market. An example of this would be one of India’s largest private banks, which has more than 12 apps listed on Google Playstore. Add in the complexity that comes from registering on the app store, providing regular upgrades, a diverse user experience across these apps, and the fact that the apps are grappling with each other for the space and mindshare on the mobile landscape. This makes for headaches for the bank’s IT department and a very clunky experience for consumers.

  • Evolution of the technology in terms of messaging front-end and AI backend

Modern messaging apps platforms like Facebook are adding features at an increasing pace. This will provide a very powerful experience with the combined features of Natural User Interface (NUI) and Graphical User Interface (GUI). Simultaneously Natural Language Processing (NLP) engines are maturing at an accelerated pace to provide a strong AI backend.

The combination of NUI, GUI and NLP will take the chatbot experience to a different level and will ensure that current generation of chatbots can not only facilitate better conversations, but also help customers perform transactions with a whole new personalized experience.

Are conversational bots meant only for improving customer service?

Conversational bots can definitely help improve the experience of customer service. In today’s world, customers tend to either get frustrated dealing with automated phone systems to help resolve their query, or get inconsistent experiences with customer service agents. When dealing with a chatbot, a customer can be rest assured that the experience that they have will be consistent, and the responses will be timely and accurate. While this can help resolve queries quickly, it can also bring immense benefits to the bank. According to Forrester, the use of conversational bots can help reduce time taken to settle customer issues by 50% while also reducing call/chat volume by 35%. All this while also ensuring that the rate of success in addressing customer queries is greater than 90%. So the next time a customer has to report a lost card or a fraudulent transaction, he or she can do it over a chat comprised of 4 sentences and 2 minutes rather than a 15 minute phone call4.

But the real beauty of conversational bots lies in the ability to leverage them beyond customer service. In fact, that’s where the real differentiation lies. The next part of the article looks at how chat bots can play a role in different facets of consumer banking while also helping the bank’s employees.