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Elevate your bank's customer interactions with AI chatbots

Discover how AI chatbots streamline your banking services, offering your customers smart, fast, and reliable support around the clock.

Banking Chatbots – Revolutionizing customer service

Updated: September 02, 2023

Ever found yourself stuck in a never-ending loop of “press 1 for this” and “press 2 for that” when trying to reach your bank? Annoying, isn’t it? Now, flip the script and imagine you’re on the other end—your customers are the ones stuck in that loop. Not a great look for your brand, huh? Enter AI chatbots, the game-changing technology that’s revolutionizing customer experiences in the banking sector.

According to a report by Gartner, by 2025, customer service organizations using chatbot technology will achieve a 30% reduction in operational costs. And that’s not all. A recent Forrester study revealed that 63% of customers are happy to be served by a chatbot, as long as the option to speak to a human is available. In this blog, we’ll break down how AI chatbots are more than just a fad—they’re a competitive necessity.

Related must-reads:

Banking chatbots – Why now is the perfect time to adopt

We’re not just in a digital age; we’re in a “remote everything” age where the click of a button or a simple voice command can do wonders. And the banking sector? It’s no exception. Forget about the days of 10-minute hold times; we’re down to resolving customer queries in a mere 4 minutes thanks to the magic of AI chatbots.

It’s not just the millennials engaging away with Siri; today’s customers across demographics are leaning into voice tech. Products like Amazon’s Alexa and Google’s Home Assistant are not just novelties—they’re shaping expectations for what customer support should be. Voice bots and IVRs (Interactive Voice Responses) are swiftly moving from being ‘nice-to-haves’ to ‘must-haves’ in the banking industry.

But it’s not just about meeting the status quo; it’s about future-proofing your business. By integrating conversational banking chatbots, you’re laying down the building blocks for next-gen customer engagement.

What are banking chatbots, anyway?

Think of banking chatbots as your customer’s personal financial assistant, on standby 24/7. Fueled by artificial intelligence (AI) and natural language processing (NLP), these chatbots are far more than glorified search engines. They’re integrated into your digital platforms—be it websites or mobile apps—to provide real-time, personalized customer support.

Here’s where it gets interesting. They don’t just “understand” customer queries; they interpret the nuance of human language, thanks to NLP. Need to know your account balance, interest rate, or transaction history? Just ask. Looking to transfer funds or set up an appointment? Consider it done. And yes, they even offer financial advice based on data-driven algorithms.

Banking chatbots are setting the gold standard for customer engagement, making it faster, smoother, and more intuitive than ever.

What are the biggest pain points in the banking industry?

To appreciate the ‘why’ behind AI banking assistants, let’s take a step back and examine the major hurdles in the industry they help to overcome.

1. Tackling high abandonment rates

According to a study by Cornerstone Advisors, around half of digital checking account applications get abandoned before completion. When it comes to loans, that number skyrockets. The swift and precise conflict resolution provided by chatbots can dramatically lower these abandonment rates and elevate the customer experience.

2. Streamlining data management

The customer data that banks handle is vast, but often, it’s so fragmented that customer service agents lose precious time just piecing together a single query. Chatbots can centralize this data, making query resolution a breeze. Plus, the insights derived from this organized data can drive Personal Financial Management (PFM) advice for customers.

3. Personalization beyond ‘first name’ basis

Let’s be real—just dropping a customer’s name into an email is pseudo-personalization. Chatbots can utilize robust customer data to tailor marketing strategies based on individual preferences and behaviors.

Thinking about the use cases from the customer-first perspective, banks can build successful chatbots. Adopting a customer-first approach is crucial for building successful banking chatbots. According to Business Insider, 80% of financial institutions view chatbots as an opportunity to improve customer service. Moreover, Juniper Research estimates that chatbots can cut operational costs for businesses by up to $7 billion globally by 2023. Combine this with the Accenture report that indicates AI could add $1.2 trillion in value to the financial sector by 2035, and the implications are staggering.

What are the benefits of AI chatbots in banking?

AI-powered automations have completely transformed the customer support function across industries. Customers now expect instant and convenient support from businesses. This is true even for banking and financial services. Conversational banking chatbots are beneficial for customers as well as for the banks.

There is a long list of usefulness and perks of intelligent chatbots and voice bots, but the few specific for banking are:

1. Chatbot for 24/7 availability

When you’re dealing with financial matters, questions and concerns can arise at any hour. AI chatbots don’t clock out at 5 PM; they’re available 24/7 to provide you with the information and assistance you need. This is especially crucial for global banks that serve customers across multiple time zones.

The constant availability not only increases customer satisfaction but also boosts the bank’s reputation for reliability and accessibility.

2. Cost savings with chatbot implementation

AI chatbots do more than just answer queries; they significantly reduce operational costs. By efficiently handling a high volume of customer queries, chatbots negate the need for a large customer service team.

These saved resources can then be allocated to more critical, complex tasks, thereby enhancing overall productivity and cost-efficiency.

3. Instant response via AI chatbot

In a world where every second counts, waiting on hold can be incredibly frustrating. AI chatbots deliver instant responses to common customer queries, drastically reducing wait times.

This immediate interaction heightens customer satisfaction, making them more likely to engage positively with the bank’s other services.

4. Handling high volume requests with a chatbot

Peak business hours or promotional events can flood customer service lines with inquiries.

AI chatbots excel at managing these high volumes, ensuring each customer query is promptly addressed, thereby maintaining a uniform quality of customer experience.

5. Linguistic flexibility of chatbots

In today’s globalized world, a multilingual approach is often necessary. AI chatbots can communicate in multiple languages, breaking down language barriers and providing a more inclusive customer experience.

6. Improved customer experience through chatbots

Chatbots offer more than quick solutions; they offer personalized interactions. By analyzing a customer’s past interactions and preferences, chatbots can provide custom solutions and suggestions, enhancing the overall customer experience.

Whether you’re looking to open a new account or need to block a lost debit card, the bot is there to expedite the process.

7. Easy integration of chatbots with digital platforms

Chatbots are highly adaptable, capable of integrating with a range of digital platforms, from mobile apps to online banking websites.

This seamless integration makes it easy for customers to seek help exactly where they need it, improving user experience.

8. Scalability enabled by chatbots

As the bank grows, the demands on customer service will intensify. AI chatbots can effortlessly scale up to meet this increased workload, ensuring that the quality of customer service remains consistent.

This scalable nature makes them a long-term, sustainable solution for improving customer engagement.

9. Data collection and analysis with chatbots

Every interaction with a chatbot provides valuable data. These digital assistants analyze customer interactions to identify trends, preferences, and pain points, enabling the bank to make data-driven decisions and tailor their services more closely to what customers want and need.

10. Automation of repetitive tasks with chatbots

Tasks like checking account balances, confirming recent transactions, and resetting passwords are routine yet vital. Chatbots can handle these repetitive tasks effortlessly, freeing human customer service agents to tackle more complex customer needs. The result is a more efficient service desk and a better allocation of human resources.

11. Chatbots for up-selling and cross-selling

Chatbots can analyze available data and engagement patterns to offer financial products or services that genuinely align with your goals. This kind of targeted up-selling and cross-selling not only boosts bank revenue but also enhances customer satisfaction by providing relevant offers.

12. Enhanced security with AI chatbots

Chatbots in the banking sector are designed with robust security measures. They use secure encryption methods to protect your data, ensuring that your financial details and personal information are safe. By offering a secure channel for banking inquiries and transactions, chatbots contribute to your peace of mind.

Potential use cases for chatbots in banking industry

With everyone managing their finances from smartphones and computers, the need for online support has never been greater. Banking chatbots come to the rescue, meeting our ever-evolving digital demands head-on. Here’s how they’re changing the game:

1. Lead generation and customer acquisition

In the digital world, first impressions count, and chatbots know how to make a splash. By engaging in dynamic, real-time conversations, these savvy bots understand what ticks for the customers.

The chatbot then tosses this golden data to the sales team, who takes it from there. So not only do chatbots introduce prospective clients to the bank, but they also set the stage for a deeper, personalized interaction.

2. Automated customer support

Time is money, and banking chatbots epitomize this by cutting wait times and resolving a whopping 80% of queries during just the first call. This isn’t just your grandpa’s automated system; we’re talking about intelligent bots with a deep understanding of human language.

3. Financial advisory

Imagine a personal financial advisor that’s available round the clock. That’s what banking chatbots aim to be. With their advanced algorithms, these bots can predict customers’ spending habits and even dish out advice to help them stick to their budget. The cherry on top? They communicate in plain, easy-to-understand language, making your customers’ financial journey less daunting.

4. Smart payment processing

Remember the days when you had to log in, enter all the payment details, and double-check everything before hitting ‘send’? Those days are over.

Chatbots come loaded with smart features that process payments in a flash while maintaining top-notch security.

5. Reviews and feedback

Who doesn’t love a pat on the back or constructive criticism? Banking chatbots make it a breeze to collect customer feedback, and they do it without the bore of long-form surveys. Plus, the data gathered can be utilized to enhance customer service, contributing to better Customer Satisfaction (CSAT) scores and ultimately, bank marketing.

Yellow.ai case study for banking chatbot

UnionBank achieves 3X increase in self-serve users with AI automation

Challenge:

With a vision of ‘Leading the Future of Banking’, UnionBank wanted to leverage technology to provide an omni-channel banking experience for its customers. They were looking to elevate customer experiences by eliminating long wait times to reach customer support over calls by deploying an AI chatbot on two channels (Website and Facebook Messenger). Thus, enabling customer self-serve options to instantly resolve customer queries with conversational AI.

Solution:

Dynamic AI agent – Rafa which was designed to offer on-demand personalized banking services and enhanced self-serve adoption to UnionBank customers.

Impact:

  • High CSAT – 3x increase in chatbot usage from 28K to 120K active users per month
  • Reduced costs – YoY reduction in chatbot operating costs
  • High accuracy – 98% bot accuracy for effective resolutions at scale

How Yellow.ai can help you to create a banking chatbot?

In the competitive landscape of modern banking, standing still is the same as falling behind. Enter Yellow.ai’s Dynamic Automation Platform (DAP), the epitome of 24/7, omnichannel self-service and personalized engagement. Think of it as your bank’s digital concierge, equipped to handle a gamut of banking tasks that most humans find cumbersome.

Why reinvent the wheel when you can simply refine it? Our platform comes with a robust array of pre-built templates that fast-track the automation process. From the straightforward tasks like new account creation to the more nuanced ones like loan applications and credit card purchases, we’ve got you covered. But wait, there’s more! Each of these templates can be fine-tuned to align with your bank’s unique requirements and complex use-cases.

The term “seamless” gets tossed around a lot these days, but with Yellow.ai it’s a promise. Yellow.ai’s banking chatbots don’t just exist in a vacuum; they seamlessly integrate into your current digital ecosystem. Whether you’re working with proprietary apps, established software systems, or specialized bespoke tools, integration is as smooth as butter.

Conclusion

Bringing AI chatbots into banking comes with several strong advantages and exciting possibilities. These smart chatbots transform how customers interact, giving quick help, smoother processes, and personal touches.

Using Yellow.ai, you can effortlessly build AI chat and voice bots featuring a user-friendly interface, automated workflows, and dynamic chat suggestions powered by Generative AI

What is the future of banking chatbots?

The future of banking chatbots holds increased efficiency, personalized experiences, and improved customer service. As AI technology advances, chatbots will become even smarter and more capable, enhancing interactions between customers and banks.

According to a survey from The Economist Intelligence Unit, 77% of bankers believe that the ability to unlock the value of AI will be the difference between the success or failure of banks.

How do banking chatbots work?

Banking chatbots use artificial intelligence to understand and respond to user queries. They analyze natural language, access databases for information, and provide relevant answers or perform tasks such as balance inquiries and transactions.

By employing a banking chatbot, financial institutions can provide a personalized touch through automated service, fulfilling all customer expectations while also streamlining the bank’s operations and resources. 

What services can banking chatbots provide?

Banking chatbots step up to handle everyday tasks like transferring funds, making payments, and even sending money. They go a step further by giving you a clear picture of your financial habits – think spending patterns, monthly bills, and the ease of checking your account balance.

Are banking chatbots secure?

Yes, banking chatbots prioritize security. They use encryption to protect sensitive information and often require authentication for transactions. Your data’s safety remains a top priority.

 

Also, through careful consideration of potential threats, thorough security testing, and a user-friendly interface that gently imparts online safety awareness, these banking chatbots prove to be a secure and effective way to conduct business while prioritizing your safety. 

Can banking chatbots handle complex transactions?

Yes, advanced banking chatbots can handle complex transactions. They’re majorly designed to facilitate intricate processes like fund transfers between accounts, investment transactions, and even loan applications. 

With their ability to understand context and interact in a conversational manner, banking chatbots are well-suited to guide customers through a variety of complex financial tasks, providing convenience and efficiency.

How do banking chatbots improve customer service?

Banking chatbots provide immediate assistance 24/7, reducing wait times. 

They swiftly address customer inquiries, provide information on account balances, transaction history, and even guide users through various banking processes. This real-time support eliminates the need for customers to wait in queues or navigate complex IVR systems. 

Additionally, chatbots can resolve routine queries, freeing up human agents to focus on more complex issues, thereby boosting efficiency and response times. 

How does AI help in fraud detection in banking?

AI-driven algorithms analyze patterns and anomalies in transactions, accounts, and user behavior. This allows banking chatbots to detect unusual activities and potentially fraudulent transactions, ensuring heightened security for customers.

The future of banking chatbots is here

With Yellow.ai, you’re not just keeping pace with the industry—you’re setting the pace.
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