Conversational Banking: Humanizing Digital Processes
The definitive push towards Digital Banking
For several years, banks have been relocating their customers out of their branches and into digital channels. This has happened on a par with shifting customer needs and the emergence of a digitally-savvy generation of customers with new expectations and demands when it comes to managing their money.
At a moment where there is an increasing number of competitors from FinTech, banks have had to step up their game and reform their business models to increase efficiency while retaining customer loyalty.
More conventional customers still appreciate the personal touch that comes from visiting their branches. In some cases, like in Latin America, 70% of the population were underbanked and conducting face-to-face cash transactions before the pandemic.
Covid-19 has accelerated this shift in preferences and the urgency for banks to reach out to their clients. With branches closing due to lockdowns, banks have fast-tracked their digitalization programs, achieving in months what might have taken years, and consumers have had no choice but to use their bank’s digital channels.
Digital adoption in banks growing most rapidly in European markets like Italy, Spain and the United States, with predicted increases in digital banking of 15 to 20%.
Even those populations that did not rely on banks have had to find ways to manage their money or access Government aid, as they were confined at home. By April 2020, 50% of consumers in Latin America were conducting their banking transactions online.
Responding to overburdened contact centers
Digital transformation has affected banks and customers alike. Those who have turned to call centers to carry out transactions have frequently been frustrated at the long waiting lines and difficulties, including the fact that customers are usually relayed between different call agents when trying to carry out end-to-end transactions and have to repeat their details.
Contact centers have been overwhelmed and banks have had to respond by investing in technology to recover dwindling customer satisfaction rates. Increasing their workforce has been difficult because of confinement, prohibitive costs, and the time it takes to resolve cases by passing calls from one agent to another.
The problems faced by contact centers to tend to such a vast increase in calls and growing customer demands for 24/7 attention, through their preferred digital channels and in the language of their choice, has further conditioned the need to carefully plan out digital strategies that manage these requirements, and can increase customer engagement and loyalty towards the bank.
The need to humanize banking processes
The digitalization of bank processes has its perks but also its challenges. Although it is efficient, the replacement of in-person branch interaction with impersonal digital transactions on online and mobile channels can be a cause for erosion in customer trusts in banks if not done appropriately.
While banks have been quick to launch digital solutions, many have underestimated the importance of providing personalized services to customers. In many industries, customer experience has overtaken price and product as the key brand differentiator, with 80% of consumers stating that they would switch financial institutions for a better experience, even if they need to pay more for it.
If banks do not connect properly with their clients by providing personalization in their digital interactions, they risk making banking more price-driven and missing out on an important source of revenue and on building a stronger connection with their customers.
To respond to the need for better customer engagement on digital fronts to counter diminishing trust, banks need to comprehend how customer preferences have evolved, and establish which of these will subsist beyond the pandemic.
With these insights, banks can deliver services that adapt to new consumer behaviors, embedding personalized, multilanguage, multichannel, and 24/7 end-to-end experiences that are user friendly in their digital customer journeys. Consequently, banks are relying more on conversational AI agents to engage with customers, resolve issues, handle first-touch interactions, and escalate matters to human agents when necessary.
Conversational AI in Digital Banking: a priority investment
Amid the growing need to strengthen customer loyalty and retention, banks must ensure that their technological investments prioritize optimal customer journeys ahead of cost-saving measures and efficiency.
Financial institutions are turning to conversational banking to improve their customer experience.
Conversational banking is the inclusion of conversational and messaging technologies -to communicate with clients in text, voice, and rich formats – within the bank’s customer experience. Through this, AI-powered chatbots play a key role in answering and automating repetitive queries.
Conversational AI increases efficiency and caters to the need to provide relief to overburdened contact agents by automating processes that take a lot of their time and not necessarily require too much expertise.
The scalability of conversational AI platforms means that even in moments of peak calls, customers can always be swiftly tended to while providing valuable information and insights that can help improve services or assist human agents when issues are escalated.
But how does this improve personalized services? Cognitive-based solutions enable banks to deliver pro-active and personal customer experiences by leveraging the data that customers provide them.
The ability of AI to build up knowledge, understand natural language and sentiments and run end-to-end operations seamlessly across multiple channels and in multiple languages can provide banks that deploy these technologies with a competitive advantage.
However, banks must ensure that they are addressing the right customer pain points and deploying a Conversational AI technology that can provide the functions they need within their framework.
7 Benefits of Conversational Banking
The efficient deployment of Conversational AI in banking can optimize processes in numerous departments in a financial institution and alter how its staff work. Here are some of the key benefits:
Increased efficiency and resource management
A clear benefit beyond customer engagement is the ability of Conversational AI to save resources. Economically, a Juniper study states that the use of chatbots will save banks up to $7.3 billion worldwide by 2023. This represents a time saving of 862 million hours.
Swifter customer engagement for the front-office
The effects for the front-office will also be easily noticeable. Conversational AI bots can automate customer queries, from reviewing an account or payment policy to changing credit limits, handling refunds and more.
This enables human agents with the time and resources to provide more immediate and efficient experiences to the bank’s customers.
Actionable personalized insights with data analytics
On an analytical front, chatbots can act as a listening channel from which banks can understand their customers and proactively deliver personalized information, advice, recommendations offers and services in real-time.
The ability to contextualize products and services can increase brand loyalty and the lifetime value of customers.
Optimized back-office procedures
Chatbots need to be capable of executing operations. With Robotic Process Automation, tasks can be implemented while increasing processing speeds. Automated back-offices will execute processes compliantly.
Chatbots speed up repetitive tasks and save time, meaning that staff can focus on more complex back-office procedures like training staff or managing internal operations.
Constant availability for customers
Conversational AI bots are available 24/7 and cannot have bad days or be susceptible to human error. A customer can access a chatbot via the device that they want, as if they were contacting their local agent and can keep track of the conversation and customer details even as they switch from one device to another.
Easy integration capabilities and scalability
Many businesses and enterprises seek the best of different services to provide unique customer experiences. Banks may think alike. Chatbots can be easily integrated with third-party services. New tools will facilitate integrations with APIs. Additionally, conversational AI platforms are easy to scale whenever needed and without having to recalculate resources.
Leverage digital technology with human skills
Conversational AI chatbots facilitate processes where there is a lack of access to employees. This does not have to be a threat to workers. Chatbots and humans will work together to provide an even higher quality user experience.
By handling routine requests and processes, more time is given to provided training and specialization to human agents.
Getting started with Conversational Banking
Customer experience is a major objective for banks at a time where face-to-face interactions and customer loyalty is wavering. Banks need to put their customers first when planning their business operations and commit to delivering proficient experiences that go beyond seeking financial benefits.
Banks must look at proven solutions that they can trust and benefit from the scalability and easy roll-out of features, and importantly, the ability to provide contextually accurate interactions with their clients.
Digital Transformation: The Definitive Guide (2021)
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