Banking on the Next Big Thing: Chatbots

Recently, the banking industry has been buzzing about user interaction, particularly around the topic of conversational interactions, or chatbots. Over the last year, chatbots have gained a lot of ground and the implementation will be what’s next in the evolution of digital banking solutions in 2017.

Advancements in artificial intelligence and cloud computing, coupled with the proliferation of messaging apps, are fueling the rapid development of chatbots and transforming how people communicate with their banks. The increased emphasis on digitalization and evolution of messaging apps makes chatbots the next communication platform between banks and their clients.

Customers want a simplified service on channels that they frequently use and now banks can start to carry out tasks through outside channels like Facebook Messenger and Whatsapp without extending business logic. About 2.5 billion people are using at least one messaging app and Facebook Messenger alone has 900 million users. Reaching customers through messaging is easier than ever and banks should capitalize on this.

Not only will financial firms be able to engage with customers where they already are, these advancements also open the door for firms to offer services via channels that will exist in the future and serve clients wherever and whenever they choose. One of the major benefits of conversational interactions is that they are guided more naturally than traditional approaches and have real-time reactions.

Moving towards simplicity in financial interactions and communication will provide customers with the quick and accurate answers they desire and chatbots are a natural evolution of self-service offerings in the financial services industry. Clients will now be able to open a new account, modify personal information and complete the full onboarding process conversationally through chat applications. Chatbots are one interaction channel among others that share the underlying business logic ensuring that rules and constraints are the same, no matter which way you communicate.

Banks should be shifting to more customer-centric software that provides better user experience and improves customer service. The need for efficiency and simplicity has increased and implementing chatbots will help free up advisors and make customers’ lives easier.

Although chatbots are in their infancy, the demand is rising and the technological advancements are quickly catching up. Implementation of chatbots in the financial services industry is already being seen with companies like MasterCard, Bank of America, and to streamline customer service operations. Chatbots are becoming the go-to hub for consumer needs in banking and will dominate the future of messaging apps to deliver a more personalized and seamless customer experience.

Although there are a lot of regulations in the financial services industry regarding security and privacy, there will be technical solutions to address auditability, security and privacy for chatbots. The key to a successful chatbot is making it all about the customer and providing valuable information and insight concisely. It’s all about the right infrastructure and design.

Indeed, chatbots are still in their infancy. But, this is the moment companies can have the biggest impact by applying new, innovative technology. The space for chatbots is rapidly growing and more innovation will come in the artificial intelligence sector to meet the needs of new generations.

The norms of interaction have changed and chatbots are transforming the way customers communicate with their banks. These conversational interactions are not replacing, but complementing traditional interaction styles and they aren’t going away anytime soon.

Written by Glenn Bolstad