FinTech

How Can Chatbots Be Used Efficiently In Banking

Akhil N P | Last Updated on : February 22, 2021

Chatbots In Banking

Over the past decade, Online Banking has significantly evolved and has increased in popularity among customers. Due to this reason, banks are held at higher standards when it comes to building a better business-customer relationship. While there are many possible solutions, the most recent one to improve operational efficiency is chatbots! 

What Are Chatbots in Banking?

A chatbot, sometimes called a bot, is a computer program created to stimulate a conversation with a human being through websites, messaging applications, telephones, or mobile apps. The banking industry started using chatbots in the early 2000s through standard text messaging. When given specific commands, these chatbots can do fundamental tasks like checking an account balance. 

How to build chatbots for banks?

Since chatbots are software programs, these can be programmed to any level of smartness. Depending on your requirements, you could create a simple button-based chatbot or a very advanced AI-powered contextual chatbot. 

A chatbot whose primary function is to fetch statements, account balances, or even transfer money would not require AI. However, AI is needed in cases where you need a purely conversational chatbot, and these should be trained with many data.

You can create a chatbot from scratch by setting up your own NLP, or you could go for a third-party bot service that could help you set up your chatbot.

No matter which type of chatbot you go for, you would need these essential elements to build well-functioning chatbots in banking:

  • Rich actionable messaging
  • Security
  • Natural Language Processing
  • A chat interface that will allow customers to make conversations with the chatbot.

Top use cases for chatbots in the banking sector

Chatbots in banking are used for multiple purposes. Chatbots would be present in any area where a conversation is essential. A few use cases where chatbots are necessary for banking are:

Information delivery

Chatbots can efficiently deliver general information that users would require. These are simply like FAQs that are provided over chats by the bots. Using these information providers, customers will be able to open a new account in no time, get locations to the nearest ATMs, solve general credit card problems, and more!

Customer support

Chatbots have evolved tremendously in the area of customer support over the past years. Chatbots can now solve general user queries faster and efficiently, making them an indispensable part of the customer support space.

Back-office tasks 

Chatbots can be a very efficient helper in back-office tasks as well. An example of this is JP Morgan Chase’s COIN, which helps their team read complex contracts and analyze them quickly. The chatbots are quicker and more accurate than human lawyers. 

How can chatbots be used efficiently in banking?

The best possible solution that can be implemented soon is to integrate the good from both the chatbots and the humans; the empathy and cognizance of humans and the speed, accuracy, and eternal availability of chatbots. Here is how you could efficiently use chatbots in banking:

  • Leverage agility, speed, and 24 x 7 availability of chatbots to provide answers to basic FAQs, saving hundreds of man-hours and resources.
  • Let chatbots handle simple customer queries and have few human support agents for complex questions.
  • Feed essential data from the past customers’ conversations where the chatbots failed so that the chatbot learns to solve the same queries in the future. 

Chatbots in banking: How they improve customer experience?

Progress of Personal Banking

The introduction of chatbots in customer service has revolutionized personal banking to some extent. Chatbots reduce customer waiting time and specific paperwork, allowing the bank to help solve customer queries faster and provide personalized services while saving much time for both the employees and the customers.

Powerful Automated Customer Service

Chatbots are extremely helpful in data analysis, detection of fraud, and data capture. Since bots are used nearly everywhere, these can help identify problems initially and help keep customers updated about their accounts. 

More reasons to consider chatbots for customer service

A few advantages of chatbots in the banking sector are:

  • Chatbots work extremely fast.
  • They can help customers round the clock and can work 24*7, all year.
  • Chatbots can lead to substantial cost savings in the company.
  • Chatbots help save time by solving basic customer queries, so the customer support employees have more time to focus on complex questions.
  • Chatbots will provide users with a more personalized experience.

Some of the key points to remember while building a chatbot

  • The level of smartness of the chatbots depends on the way they are programmed. The better they are programmed, the better their output will be.
  • Chatbots might face troubles when handling multiple dialects and languages.
  • Gathering and cleaning relevant data and then training the chatbot to make it more efficient can be a very lengthy process.

Examples of banking bots around the world

Most leading banks in the world have begun using chatbots nowadays for their primary tasks. 

Erica (Bank of America)

Bank of America, a US banking industry leader, has recently introduced Erica, their new virtual financial assistant, AI-driven. Erica helps the users lock/unlock their cards, check their account summaries, keep up with their e-bills, and solve other popular basic queries. Erica is advanced enough to take not just texts but voice inputs as well!

Eno (Capital One)

A text-based chatbot, known as Eno, was introduced by Capital One, trained to accommodate all their customers. Eno helps the clients monitor charges, detect fraud, answer basic queries, and even track expenditures. 

COIN (J.P. Morgan Chase)

J.P. Morgan Chase uses their chatbots for an entirely different purpose – their chatbots are used for streamlining operations in the back-office section. Their virtual assistance, COIN, help them quickly review highly complex loan-agreement documents. COIN has a minimal error rate and saves the team about 360,000 man-hours every year!

Chatbots are a fantastic option to solve many of your customers’ problems, and technology only keeps developing! Chatbots are bound to get smarter with significant advances in Machine Learning and AI and will be our way forward!

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Akhil N PAkhil N P is Solution Architect with ClaySys Technologies working on the .Net platform for over 10 years. He has been part of the ClaySys AppForms initiative from the beginning. He has also worked on different platforms including Xamarin, RPA, WCF, Silverlight, ASP .Net, Angular etc. He is now actively involved with the RPA technologies, evaluating different platforms of RPA and working towards creating a best practices patterns for delivering an RPA projects and making sure we use the RPA technologies to its maximum potential.
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