Financial institutions have been an example of advanced technological progress ever since mobile banking became the norm. You can connect with your accounts more easily than ever with a few taps on your phone’s apps. However, the times are changing again. The COVID-19 pandemic has radically shifted how banks operate. Now, conversational AI could bring banks in the right direction.
Artificial intelligence (AI) uses machine learning and natural language processing (NLP) to learn as it evolves. It can handle customer interactions quickly and provide solutions for their needs. With social distancing and stay-at-home orders in place, people need new technology to connect more quickly with their banks.
You may not always have the option to visit a bank in person due to outbreaks or shutdowns. This lack of access can lead to constantly busy phone lines. Digital employees, though, are the new trend that will provide more services, better innovation and improved customer satisfaction. First, banks will need to adopt these new services.
It’s easy to conflate chatbots and conversational AI. Chatbots were once the pinnacle of automated customer service, answering questions and solving problems quickly. Now, AI is showing us a better way to help consumers.
Chatbots are limited in their abilities. They can only handle a specific amount of information at once from a customer. If you have two questions, a chatbot would only be able to answer one at a time. A chatbot can’t typically detect changes in customers’ tones or goals, either. This dynamic can leave the client frustrated, especially if the chatbot doesn’t solve their inquiry.
Instead, adding AI to the mix creates an entirely new virtual assistant. Conversational AI can determine what customers want even if they change their minds. It learns as the conversation progresses, adapting to each customer at the moment. That way, the virtual assistant provides personalized experiences. In the fIntech sector, many banks are already ahead of the curve, using smart chatbots as virtual assistants to support their customers.
You can ask to send money at a certain time and the assistant will schedule it. You can also immediately receive alerts and notifications about any changes or potential fraud cases. These assistants go above and beyond remote banking norms.
The key difference between chatbots and conversational AI is that these new assistants use machine learning and NLP to constantly evolve. Conversational AI in form of smart chatbots brings banking right to the consumer, wherever they are. Clients won’t need to contact the bank or wait for an answer or assistance — it all happens immediately with AI.
Since the pandemic has accelerated remote banking, these assistants are no doubt the next step for banks. According to Juniper Research, 90% of banking interactions will use automation by 2022.
There’s a growing trend around the world of streamlining banking, but there’s more to the story. Payments have become their own service. Recently, Hydrogen released a report on how Payments-as-a-Service (PaaS) has taken off. With big tech companies like Apple and Google offering financial services, mobile payments and banking are now a competitive business.
For financial institutions to compete with bigger entities like Apple Pay and Google Pay, conversational AI provides a clear way forward. It allows banks of any size to keep evolving with technology and their consumers’ needs. People want simple ways to pay bills and bank — speaking with a digital employee remotely can provide them that.
Of course, with rapid innovation comes obstacles ahead, too. While the pandemic forces people to use mobile technology for banking, not everyone will be happy about it. A study from Capgemini Research Institute found that only 46% of customers trust AI-based interactions. Banks must work on ensuring privacy and security throughout all conversational AI interactions.
However, the good news for banks is that consumers’ trust in AI is showing promising growth, with that percentage going up each year. Now, with a focus on touchless technology and remote innovations, customers will be working with AI more than ever. Banks, especially, can use the pandemic as an opportunity to step up their remote services and provide more customer satisfaction.
As big tech companies use tools like Alexa, Google Home and Siri to help consumers with payments and shopping, they fuel the PaaS trend. For banks to properly compete with this ease of use, they must adopt conversational AI.
This AI facilitates better interactions with customers, can handle countless inquiries at once and propels financial institutions ahead of the technological game. With the pandemic forcing remote adaptation, you’ll likely see solutions like conversational AI popping up more often in banks.