Generally speaking, software solutions have long been playing a vital role in the BFSI sector. Until recently, their uses were largely confined to streamlining business functions and operations, with narrow personal interactions. However, the competition puts pressure on fintech companies and banks to grow and evolve fast. In response to that, banks and fintech companies – from newly formed startups to established ones – aim to provide new services quickly, without customers having to be present at bank branches or offices. So that they can fulfill the needs of their customers and acquire new ones.
AI Chatbots and virtual assistants have been used in customer service for a long time to achieve such a goal. They are now becoming an indispensable channel in the dynamic world of fintech and digital banking, complimenting the services provided by human agents. Thus, those chatbots are paving the way for a customer-centric approach to banking and fintech and redefining the way such organizations serve their customers.
We share the various applications of chatbots in the fintech and banking sector. Specifically, let’s examine the types, use cases, benefits, and key features that make up an effective fintech and bank chatbot, and how they can transform the customer experience.
What is a banking chatbot?
In banking, chatbots are developed using advanced technologies such as natural language processing (NLP) and artificial intelligence which enable them to understand written and spoken text-to-speech so that they can respond to a range of customer inquiries like real humans (e.g. providing product information, assisting with fund transfers, bill payment, etc.).
With NLP, fintech or banking chatbots can be accessed through websites, mobile apps, or messaging platforms.
In its simplest sense, a bank chatbot and/or virtual assistant can simulate human conversations and interactions. These chatbots can perform a variety of banking functions with a primary goal of ultimately improving the customer experience. They achieve this by speeding up response times and increasing the efficiency of banking operations.
How do chatbots help to solve digital bankings problems?
Digital banking and fintech provide many advantages such as fast, convenient, and efficient. However, it also poses many challenges.
With digital banking and fintech, customers can access all the services online, at any time with an internet connection. As a result, if the service is available 24/7, customers may need help with using the services 24/7 as well. Here, the support service agents may likely struggle to meet all the demand. This can result in long waits and frustration for customers trying to get quick assistance and resolve their issues.
Sometimes, when call centers are overloaded, customer wait times can increase significantly. This can be difficult for customers who need urgent help, or for those whose schedules overlap with their bank’s working hours. Additionally, a busy support agent may not be able to help another agent, even if they work in the same team.
Another challenge when it comes to personal human support agents is the wide variation in quality, efficiency, and accuracy of each individual customer service case. So, as a digital bank services provider or fintech company, how can you win over customers with quickly delivered desired customer services and keep services quality high?
Why developing Chatbots for Digital Bankings and Fintech?
Fintech and digital banking systems can sometimes be complicated and difficult for users to use, especially the senior ones. The new and innovative digital banking and fintech products can deter new users. Without proper support and on-boarding, they can struggle to use the platforms. Business as well as customers suffer because of this. It also increases the workload of customer service employees who have to troubleshoot these issues.
But even as customers learn to use existing systems, changes like new features and designs are still being made. New digital banking features and financial products are constantly emerging. Educating customers about their uses and benefits is a big part of the challenge.
Security concerns
Digital banking, as well as fintech, is always vulnerable to cyberattacks and data breaches. Customers trust these platforms with their personal and financial data, so security is critical. Unfortunately, cyberattacks and identity theft are on the rise around the world. While security measures have been introduced and applied to help address the issues – such as two-factor authentication (2FA), OTP and tokenization – they can be confusing for many. This is especially true for senior customer groups who are less tech-savvy but more vulnerable to scams and fraud.
Banking efficiency
Banking and fintech are businesses. And like any other, inefficiencies are costly. Customer facing customer service teams often handle mundane tasks. These tasks are not only boring for these employees, but also limit their ability to perform more complex and useful tasks. Doing repetitive things can be frustrating for services agents team and potentially leads to burnout.
Additionally, there is another issue of language barriers and accessibility. Many customers, from different background, would have different language preferences and support needs. Not all digital banking and fintech platforms are well prepared to address these needs effectively.
Personalization
To effectively deliver a personalized digital banking experience is difficult. This is due to the sheer volume of customers and transactions. However, banks and fintech companies must be able to meet the personalization demand if they want to stand out from the competition and retain loyal customers. This is a difficult problem.
Types of digital banking bots
There are two main categories of chatbots used in banking and fintech services – rule-based chatbots and artificial intelligence (AI)-based chatbots.
- Rule-based bots: To communicate with users, this chatbot follows predefined rules and scripts. They are ideal for resolving simple questions and queries, and are often cheaper and easier to implement than other chatbots.
- AI-powered chatbot: By leveraging artificial intelligence/machine learning technologies, specifically natural language processing (NLP), this type of chatbot can understand and respond to customer inquiries more naturally and effectively. This allows them to provide more personalized human-to-human interactions to customers.
Customer service bots
These banking services bots are developed to handle a variety of customer queries related to banking services. For example, they can provide information about your inquiries such as account balance, recent transactions, and other account details. These bots can also help with your banking transactions including assisting with fund transfers and bill payments. Ultimately, banking service chatbots guide users through transactions like a virtual assistant, providing an easy way to help you manage your finances.
Investment and finance bots
Banking chatbots can analyze each customer’s unique data, including examining transaction histories and spending patterns, to make personalized recommendations for saving, budgeting, and investing.
For example, wealth management bots can help customers optimize their investment portfolios. They can provide insights on market trends, portfolio performance, and offer personalized investment advice.
Credit and financing bots can help customers with questions about credit and personal loan products. They can analyze customer data and offer individual information about loan eligibility, fees, and others. They can also assist customers with completing the loan application process.
Security bots
These banking chatbots monitor activities to detect suspicious transactions or anomalies and alert customers to potential fraud. This chatbot or virtual assistant can also assist customers to incorporate various security measures to protect their accounts. Some security chatbots also offer multi-factor authentication options for extra layers of security.
What are the top use cases for chatbots in digital banking and fintech?
There are many applications of AI chatbots and virtual assistants in digital banking and fintech. They significantly improve customer experience and service efficiency. Below are the common examples of chatbots applications in banking and fintech sectors:
- Customer service and inquiries resolution: Overall, AI Chatbots can provide responses to your banking account queries such as account balances, recent transactions, banking services, or more. The whole process only takes a few seconds. This instant access to services support decreases waiting time and increases customer satisfaction.
- Make transacting easier: Banking chatbots can facilitate banking transactions such as funds transfers, bill payments, and other transactions, all through a simple chat interface.
- Personalized recommendations: Chatbots offer information about relevant banking products to customers such as loans, credit cards, and investment opportunities. They provide personalized financial advice and use AI-based data analytics to help customers budget, save, and invest.
- Fraud detection: Banking systems monitor accounts activities 24/7. Chatbots can send real-time notifications to customers about specific account activity. This helps detect and prevent fraud. They can also send reminders for bill payments, low balances, loan due dates, or other deadlines. These reminders help customers avoid late payments and penalties.
- Product onboarding: Chatbots guide new customers with the account opening process. They help you fill out forms and explain your banking T&C. They guide customers through loan applications and offer tailored information about loan eligibility, applicable interest rates, and documentation requirements. They can also provide application status updates.
- Collect customer feedback: Chatbots can conduct surveys and collect feedback and provide these information to banks to improve their services. They also reach out to customers with updates, tips, and educational content. This helps create a personal relationship with customers and improve their banking experience.
Digital banking chatbot development: What to consider?
There are several key features to consider when considering a banking and fintech chatbot/virtual assistant.
- Speed: Like any customer engagement solutions or tools, speed is everything. The longer you keep your customers waiting, the more it will impact overall customer satisfaction. The main advantage of a digital banking bot is that it is always available and can adapt to customer needs. Building the right AI chatbot for your bank or fintech organizations means your customers get quick answers and solutions.
- Accuracy: The accuracy of your chatbot’s responses is essential to building trust and credibility with your customers. It must be able to fully understand the customer’s inquiries. It must also provide relevant and trustworthy information. If you fail in this area, customers will lose trust in your entire brand.
- Personalization: By leveraging AI technologies and analyzing customer data such as past transactions or common behavioral patterns, banking chatbots can provide personalized user experiences like suggesting relevant financial products or services. This can help create a more personalized and relevant customer experience.
- Multilingual support: In today’s world, it is imperative that banking chatbots can deliver services in multiple languages. Banking chatbot should be able to communicate easily with customers across the globe without language barriers.
- Security: Since chatbots handle customer’s sensitive financial and personal information, security is critical. A right banking chatbot should focus on security. This will protect customer data and prevent unauthorized access. By incorporating security measures like advanced encryption protocols, multi-factor authentication, and regular security checks, chatbots can provide customers with peace of mind and increase overall trust in the banking system.
- Integration with banking systems: To allow the chatbot to assist customers with banking services, it requires access to real-time information about the customer’s accounts, transactions, and balances. Thus, banking chatbots should be integrated with the bank’s core systems in order to do so.
- Ease of use: A user-friendly interface is essential in the bankings and fintech sector. Banking customers want a chatbot that is easy to use and understand. This is especially helpful to non-tech-savvy customers.
How we can help you with your digital banking & fintech chatbot development
At Trustify Technology, we specialize in building custom AI solutions that focus on the customer experience and solving unique needs of banking and fintech customers. Our team of experts is dedicated to designing, developing, and deploying cutting-edge chatbot technology solutions to help improve customer engagement and achieve operational excellence.
Chatbots are no longer just a trend in banking and fintech, they are a necessity in the digital age. If you need help develop your custom chatbot, contact us today.