AI for financial services

How financial services providers are using AI-powered chatbots to up-level their customer experience

  • Swathi Bhaskaran
    Swathi Bhaskaran
  • May 04, 2020

It has become imperative for banking and financial services providers to adopt new technology and customer experience approaches just as their digital-first counterparts have. AI plays a crucial role in that transformation.

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In the midst of the coronavirus, a contracting economy is leaving many people panicked about their personal finances. 2.7 billion of the global workforce are facing full or partial closures of their workplaces as governments rush to provide stimulus packages to soften the economic blow. Subsequently, customers are eagerly seeking out answers and advice for how to manage their investments, savings accounts, retirement funds, debt, and more. In fact, when asked what kinds of messages are of the highest interest, 53 percent of consumers surveyed say "critical updates about what I can expect from an individual company," and 37 percent want "inspiration and strategies to stay safe and healthy based on a company’s area of expertise."

Providing customer service at scale not only requires the transition to digital services that's been underway years prior to COVID-19 but also fully enabling chatbots and virtual assistants to provide personalized, 1:1 interactions across all customer channels.

In a survey by Digital Banking Report, 54 percent of respondents—comprising banks and credit unions—ranked the usage of AI and advanced analytics more important than improving their customer experience. The tide of the market is changing. It has become imperative for banking and financial services providers to ride with it, and adopt new technology and customer experience approaches as their digital-first counterparts have.

Chatbots and AI: Your intelligent assistant

Today, AI and chatbots are instrumental in creating a stellar customer experience in the banking and financial services space — in practice, known as conversational banking. Able to provide 24/7 support, fraud detection, risk assessment, and so much more—they’re fast, they’re efficient, and they’re more cost-effective than human agents for reducing resolution times.

For leading financial providers, combining intelligent automation and conversational messaging scales personalized service. A customer can ask a bot a question, transition seamlessly—in the same channel, in real-time—to a human if needed, and then go back to a bot when the time comes. This considered approach lets businesses solve issues without expensive human interaction while also empowering agents to be more responsive, and field more inquiries at once.

It is estimated that the cost savings from the use of AI and chatbots in the financial services sector will reach 7.3 billion USD by 2023. This study also suggests that banks will save 862 million hours, equivalent to nearly half a million working years.

The financial services sector recognizes the importance of using chatbots for conversations that can easily be automated. Yet, three out of four financial services providers agree that they are not prepared to implement AI in their operations.

Top benefits of chatbots

Cost optimization: AI and chatbot are not employee replacement technology. They have a symbiotic relationship with human agents to provide a great customer experience. A chatbot is expected to cut back 22 percent in costs for financial service providers by 2030.

Proactive customer engagement: Customers mention 24/7 support as the biggest benefit of chatbots for the online services they use. They’re either greeted by a chatbot or routed to an agent to answer queries that are beyond the capabilities of a chatbot. From sending customized offers for up-selling and cross-selling products to providing relevant information by pulling out their transaction history from the CRM, chatbots can do it all! You can also push notifications dynamically using segmentation and personalization.

Improved operational efficiency: Using Robotic Process Automation (RPA), a technology that combines robotic automation and artificial intelligence, a Singaporean bank has reduced the time taken to re-price home loans from 45 minutes to 1 minute. While the AI technology crunches numbers in the back-end, your employees can use the time to work on more complex problems.

Automated customer feedback: Most staff do not solicit feedback unless it’s a part of the process, and customers hesitate to offer feedback because they think it gets lost in the black hole of information. Fifty six percent of respondents said conversational surveys are easier to express their opinions. Using chatbots for customer feedback will help financial services providers improve customer confidence that their feedback will be taken seriously. A conversational bot can alert you to a problem, or nudge in the right direction to keep the customers satisfied.

Watch the on-demand webinar, Creating self-service experiences during COVID-19 with IVRs and Chatbots.

Leading financial services companies using chatbots and AI to up-level their customer engagement

68 percent of digital banking users report frustration with their banking experiences. Meanwhile, coronavirus is casting a spotlight on fintech, as consumers and the U.S. Treasury Department alike embrace its promise of ease and convenience. In reference to the U.S. government passing a 2 trillion stimulus package in March, Treasury Secretary Steven Mnuchin stated “any fintech lender will be authorized to make these loans”—a historic first. In April, fintech platforms earned further validation when the Internal Revenue Service allowed eligible recipients to elect to receive stimulus payments electronically. All of which is to say, legacy financial services companies, have just as much -- or maybe even more to prove -- now than fintech.

One example is ING, founded in the 18th century. It's voice-driven chatbot, "Inge," is available in ING's mobile banking app. Much like Apple’s Siri, INGe not only generates account statements and makes payments in a click, but also helps with money management and offers financial advice.

Read more about how ING has been a pioneer in differentiating through communication.

Finserv providers like Citi, JP Morgan Chase, and American Express use Persado, an AI-powered technology for tailored brand messaging.

Persado creates messages based on the data that resonates the most with customers, which enables financial services providers to create a meaningful dialogue with their customers.

Citi has increased their email open rates by 70 percent, and the click-through rate by 114 percent with Persado.

Artificial intelligence without context is not intelligent

Forward-looking financial services are adopting AI to improve their customer experience because retention costs are much lesser than acquiring new customers. The probability of selling to an existing customer is about 70 percent, while the probability of selling to a new lead is just 20 percent.

Especially now, trust is a key differentiator: only 56 percent of respondents trust their insurer to look after their financial well-being.

Customers don't mind sharing personal information if it helps financial services providers improve their interaction experience. Here’s how you can boost customer trust with an AI-powered chatbot:

  1. Be available anytime and anywhere with support and customer care across a website, SMS, and messaging apps.

  2. Interact, rather than transact. Provide context-specific and personalized engagement.

  3. Provide predictive, proactive assistance based on intelligence from past interactions and anticipated needs.

Next steps

Identify existing business goals and areas to deploy AI and chatbots.

Whether it is automating simple areas of customer support or engaging visitors with a human-like assistant, you must outline and have your goals well defined. Also, ensure that your chatbot strategy aligns with your customers’ needs. It is imperative to create target personas and understand their needs and expectations before deploying chatbots.

For example, John loves shopping online and overshoots his credit limit most of the time. The chatbot creates a trend of his expenses from the past months and sends a report to John at the start of every month to make informed decisions Assign specific KPIs to measure, achieve, and modify to obtain the desired results.

Some of the most common chatbot KPIs are retention rate (percentage of users returning to use the chatbot), bot messages (total number of messages sent by the chatbot in a conversation), active users (who read messages from the chatbot but do not engage), etc. KPIs aren’t set in stone—they can be customized based on your goals and can be altered at any time. Analytics tools like Botanalytics help analyze the bot data and make the necessary changes. Catalog the required technology and talent for development and deployment.

The first two steps in this exercise will give you a fair understanding of the technology and talent required to deploy the chatbot. Are you going to buy or build? Will a simple chatbot suffice? If it’s a complex project, you may need to deploy a chatbot with natural language understanding (NLU). Based on the answers to these questions, assess if you have the required talent or if you need to hire. Build branded, conversational chatbots.

A chatbot is yet another communication touchpoint of your brand, like your website or social media. The overall look and feel of the experience should be consistent with your brand’s style. Customers expect chatbot conversations to be as smooth and natural as human interactions. Design an empathetic chatbot with a personal touch. Keep the flow conversational and avoid asking open ended questions. At any point during the conversation, if the chatbot fails to answer the user’s questions, always make it easier to contact a live agent to avoid a dead end.

The takeaway

Now, more than ever, consumers are looking to their banks and other financial service providers for a sense of assurance, trust, and help. Chatbots make it possible to provide personalized service at scale while reducing the demand customer service teams.

Twilio for financial services

Learn more about how Twilio helps financial services enhance their customer engagement.

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Swathi Bhaskaran

Swathi Bhaskaran

Swathi is a freelance writer for tech & SaaS companies. She has helped enterprises and startups with high-ranking, value-packed marketing content. When she's not tapping away at her computer, you can find her reading or cooking with a snack in hand. You can say hi to her on Linkedin and Twitter.