Chatbots represent the next evolutionary step in automated online assistance. A chatbot is defined as “a computer program designed to simulate conversation with human users, especially over the Internet.” Chatbots are most commonly used to provide text responses on websites but are also often featured as an audio service over the telephone.
There are already thousands of websites that feature semi-automated chat support that can answer customer queries relatively well. However, this support is clunky and cannot properly understand and respond to complex questions. In most cases, these systems simply recognize keywords in the query and respond with links to relevant knowledge base articles.
Nowadays, chatbots are increasingly being integrated with artificial intelligence (AI) and Natural Language Programming (NLP) to provide a more realistic, human interaction. The technology is advancing rapidly and soon it may be difficult to differentiate between an AI-powered chatbot and a human.
The prevalence of chatbots within the online banking sector has exploded over the past five years. As more and more customers bank online, there is a growing need for 24/7 customer support. However, most banks do not have the resources to provide the required number of human support agents. To meet this demand, financial institutions have begun to implement chatbots at an alarming rate.
A single chatbot can deal with thousands of customer queries every minute so long as they aren’t too complicated. Fortunately, it seems that the majority of queries aren’t: a recent study by Acquire.io found that as much as 80% of customer’s queries are resolved by chatbots without the need for any human interaction.
This represents a huge cost savings benefit for banks and significantly reduces the time that customers spend waiting.
With over 4 billion active users on mobile messaging services worldwide, many companies have seized the opportunity to provide support via this medium. Apps like WhatsApp, Facebook Messenger, and WeChat are the most popular, with millions of monthly active users. Banks are now finding ways to serve customers via these platforms using AI-assisted chatbots.
Rather than simply answer queries or redirect customers, chatbots are now being trained to complete more complex tasks. Some banks are developing AI-powered financial assistants that will be able to help customers manage their money more productively. This is achieved through integrations with several other advanced technologies like machine learning, big data, and access to open banking protocols.
Fintech firms and digital banks, in particular, have benefited greatly by adopting chatbots to serve customers. Many emerging digital banks have no physical branches and limited staff, so much of their customer interaction is done via chatbot.
As the banks themselves are relatively simple and offer limited products, the vast majority of customer interaction can be automated. Even long-time users find that they almost never need to interact with a real human being to complete banking tasks. In fact, a Gartner study from 2016 predicted that by this year the average person would interacting more frequently with bots than their own spouse.
As AI improves, chatbots are becoming excellent salesmen. Banks are now using AI-assisted chatbots to fulfill marketing roles, generate leads, make sales, and even close deals.
With access to a customer’s financial information, banking history, and risk portfolio, chatbots can make calculated assessments and market financial products accordingly. With the help of machine learning, these systems can even document personality traits and behavior patterns to get a better understanding of customer needs.
From loan approvals and insurance sales to feedback management and social media, chatbots are solidifying their place in our financial services industry. With AI already on a path to overtake human intelligence by 2060, soon we could be the ones serving the chatbots.
Disclaimer: The author of this text, Robin Trehan, has an undergraduate degree in Economics, Masters in international business and finance, and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries, and/or employees.
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