Redefining banking experiences: From Branches to Bots

This year, much has been talked about the rise of chatbots and their potential to change consumer interactions with businesses. Like most industries, banks have dived into this emerging trend to drive better experience and chatbots are likely to replace, compliment and supplement all possible consumer interface with banks. They are set to be the most significant development ever in the financial service industry and will transform the banking industry forever.

The need to offer added convenience to consumers has led to development of new channels. Consumer interaction has evolved; from physically vising bank branch supplemented with online channels, to subsequent mobile banking and finally leading to chatbots.



Bots to make life simpler for the consumers:

Bots, powered by artificial intelligence (AI) can comprehend questions and provide answers. They present the opportunity to make customer interactions seamless — both externally for customers and internally for banks. All consumers need to do is: add a bot to their friends’ list in messenger and get it to perform routine tasks like check balance, search information on products, credit card spending pattern. It will eventually graduate to transactions and personalized financial advice from bots. Messaging apps like Facebook messenger, WhatsApp, WeChat have already opened their platforms for brands to build bots for initiating conversation and commerce with the consumers. How big the bets are on conversational commerce can be gauged by $22 bn acquisition of WhatsApp by Facebook in 2014.

Consumers will benefit from:

• Ease of access: Bots are built on chat platforms which are already loaded on users’ smartphones. Downloading and navigating through apps is time consuming and nearly a quarter of all downloads are erased after initial use. Bots can potentially become one stop shop for all queries and transactions.

• Personalized alerts & recommendations: Bots inherently provide rich source of data on consumers’ lifestyle and consumption habits. This feature enables banks to provide location based, contextual offers, helping them draw better insights on consumer behavior from the conversation history rather than analyzing clicks and navigation behavior. Consumers can set a variety of alerts including daily account balance, low balance, debit, pin requests and credit card payment through bots.

• Better financial decisions: Relevant and targeted content offered by banks via bots will lead to better consumer engagement with banks and instill financial discipline. Consider a situation where users are able to get info on the amount of money spent on a particular ecommerce site in a flash. Based on the cumulative amount of money spent, they might be inclined to cut back on the expenditures.

Banks are rolling up their sleeves for bots:

Banks are facing immense pressure in sustaining growth as nimble fintechs eat into their market share across products and services. Observably, fewer banks have harnessed AI for serving consumers but it will not be long before bots become table stakes for banks. By implementing bots, banks will save cost as they are cheaper, faster to build and don’t require a graphic user interface than apps. Chatbots can help banks deepen the engagement levels with consumers by providing real time recommendations and fine-tuning products and services based on specific consumer data.

Several banks across the globe have announced to roll out chatbot services to customers, suggesting they believe in opportunity integral to this innovation. Bank of America is building a bot on Facebook messenger to realize its vision of connected banking, entailing better access and convenience for consumers. Similarly, TD bank is also using Facebook messenger to handle customer queries. It’s not automated yet enables TD consumers to chat with live agents through messenger.

Banks have brought chatbots to Indian market with DBS bank introducing chatbots service to its customers in India and Singapore by the end of the year. Customers will be able to use natural language to converse with DBS, with the bank's AI technology enabling customers to access its services via Facebook Messenger. DBS plans to extend its banking service to other mobile messaging apps like WhatsApp and WeChat in future.



Conclusion

According to Gartner, 85% of the consumers’ relationship with enterprises involves mechanical interaction. Banks can’t afford to lose time in putting in place a “bot strategy”, especially so as their market share is being threatened by emerging fintech players. A robust bot capability will help banks recover lost ground, strengthen brand appeal and effectively market itself. It’s a win-win scenario for banks and consumers as the former acquires and retain consumers at lower cost and the latter benefits from relevant offers and utmost convenience.

(About the Author: This article has been contributed by Chitranjan Sood, Senior Manager, SapientNitro)