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Why Main Street Banks Need to Embrace Conversational AI

November 29, 2021 • 5 minute read

For banks, modernizing the customer experience can be a challenge. You have a lot of customers, and often their inquiries are urgent and complex. You’re managing a mix of online and in-branch experiences. People want solutions fast, and no two inquiries are the same.

For big banks equipped with an army of IT staff and developers, the solution is straightforward: build software solutions that enable dynamic, conversational AI-powered agents working across phone, web and text channels. In our experience, this is harder than it sounds. But big banks have the resources to attempt it, so they often do.

But main street banks? They don’t have the bandwidth to build their own AI-powered customer service solutions. For good reason, they’re likely to sidestep conversational AI altogether and rely on simple, scripted and rules-based chatbots that neither answer the customer’s question nor relieve agents of mundane and repetitive tasks. 

Luckily, for agile banks, the times are changing. New forms of AI have emerged that are designed from the ground up to handle new levels of customer complexity and deliver consistent moments of trust to a generation of banking customers who want everything to be accessible and self-service, 24/7.

Read on to find out how conversational AI has evolved, and how mid-size banks can benefit.

Customers Want Automation

Eighty-two percent of consumers expect banks to have a complete understanding of their unique needs and, therefore, deliver personalized experiences. However, only 38% say their banks were effective in personalizing their journey.

Worse, upsells are crucial, but 75% of financial institutions saw themselves incapable of determining the next best product offering on an individual basis. The vast majority are still defining or just beginning their personalization initiatives.

There is a better way. Bajaj Finserv, a young financial institution in India with an impressive growth rate, managed to rake in $100 million in sales in a single year. The young banking enterprise leveraged conversational with multilingual functionality across five channels to help customers throughout their journey. 

Bajaj Finserv’s success reflects the reality that modern customers want the speed, convenience and personalization that comes with automation.

Yes, Chatbots Used to be Terrible

Historically, local and regional banks have been somewhat hesitant about adopting technologies like chatbots and other forms of conversational AI. According to this study, only 13% of mid-sized banks and credit unions embraced chatbots in 2020. Though the figure is steadily climbing, a majority of banks remain reluctant to onboard conversation automation solutions.

Why this tentativeness? Because many of them remember the bad old days. Legacy chatbots are rudimentary, unreliable and insecure. They didn’t provide clients with personalized conversations that enhanced engagement and drove conversion rates.

And even if better software solutions were possible, agile banks lacked the resources to create them. The only option they had was off-the-shelf solutions that never quite did the job. They couldn’t adapt to the complexity of a decentralized operation like banking, or deal with the uniqueness of each customer’s needs.

In short, no one in the world of conversational AI would deny it: chatbots used to be terrible. But no longer. New-generation AI-powered chatbots are better, faster and smarter. And the innovations are coming at just the right moment. Because the up-and-coming generation of banking customers wants their banking experience to be as seamless as texting a friend.

‘Why can’t I just message my bank?’

Day by day, customers are moving away from websites and mobile apps to do their business. Though the banking industry has been slow to innovate, many consumers want banking to be as simple as the rest of their digital life. Many of them wonder: “Why can’t I just message my bank?”

Consider: 53% of Gen Z and 42% of millennial banking consumers want digitized customer support, as opposed to 27% of the baby boomers. A Morgan Stanley survey discovered that 47% of 16- and 17-year-old smartphone users and 71% of the 18- to 19-year-olds use digital banking services, including smart chatbots, via their mobile devices. And 74% of consumers prefer chatbots while looking for answers to simple questions. There’s no reason to think that banking customers don’t feel the same.

More importantly, the upcoming new generation of banking consumers will likely perform their banking business through mobile apps instead of going to the actual bank. Research has found that 99% of Gen Z and 98% of millennials prefer mobile banking for various transactions and tasks, like checking their account balances, viewing their credit score and making deposits. If mid-size banks don’t up their customer messaging capabilities, they are never going to win over the younger banking consumers.

Customers want to engage with rapid, AI-driven banking support — as long as it does the job. And here’s the good news: AI agents powered by conversational machine learning and natural language processing advances are different. Dynamic AI agents can help banks combine the power of human intelligence to deliver personalized support to all customers — on-demand, omnichannel and omnilingual.

Solution: Deploy Human Agents on the Hard Problems

Customer interactions in banking can indeed be complex. Customer journeys can loop in multiple departments and make for a winding journey. However, the majority of support requests and queries from bank consumers are about common and non-complex issues and concerns. 

The solution? Deploy AI agents on the easy problems, and deploy human agents on the hard problems. 

This way, humans aren’t burdened with routine and repetitive tasks, such as looking up balances, transferring funds, researching direct deposits and giving directions and brand hours. Meanwhile, customers don’t have to wait, and routine tasks are taken care of at any time through AI agents. Overall, the bank wins, as they provide a better customer experience by having humans who can spend more time with customers on the tough problems.

Could the old generation of chatbots manage this? Could they team up with human teams? No. But their replacement — the next generation of dynamic AI agents — can do much more, speeding customer resolution and freeing human agents to focus on the interesting work. Modern banks are complex, decentralized enterprises. When you automate sections of CX, you adapt to this reality:

  • Online banking has allowed consumers to perform certain bank transactions outside working hours, such as online payments and fund transfers. Like all bank transactions, issues and problems can arise from these situations — smart AI agents can provide the support and answers consumers need right then and there, even during holidays or outside business hours.
  • Dynamic AI agents can handle CX requests on multiple channels, locations, languages and integrations — with one seamless solution. Banks can offer 24/7 customer support in multiple languages. 
  • Dynamic AI agents can be created through fast, no-code deployments.
  • Tracking branch locations, business hours, local promotions, holidays and more is crucial to local banking. Clumsy old chatbots weren’t capable of fully covering this particular need. But new dynamic AI agents can.

Banks have tried to get the human out of the loop. Witness IVRs, mobile apps, FAQs on websites, phone numbers buried where no one can find them. This hasn’t worked. The key is to keep humans in the loop, but only where their talents are required and best allocated.

Agile banks need to invest in technologies that will enable them to enhance customer service, deliver personalized experiences and create moments of trust throughout the customer journey. Dynamic AI agents allow for the deployment of technology with a human touch, allowing banks to elevate their consumers’ experience to new heights through a blend of artificial and human intelligence. 

Ready to put the human back into the banking experience? With dynamic AI agents, anything is possible. Request a demo to learn more. 

 

yellow.ai

yellow.ai helps complex and decentralized enterprises deliver moments of trust in every customer and employee interaction with dynamic AI agents that are friendly, efficient, and consistent.

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