Will Chatbots change the face of banking in 2020?

The uniqueness of modern banking stands on three pillars: speed, trust, and communication. Technological upgrades like internet/mobile banking, UPI, Chip cards, etc. have imparted speed and trust. However, the real strength of banks lies in their customer relations, which indubitably relies on communication. Artificial Intelligence has contributed largely to improving this aspect through Chatbots. AI Chatbot employs cognitive analytics to learn the customer’s thinking and provides instant response.

A report from MIT Technology Review shows that 90 percent of businesses reported faster complaint resolution through Chatbots.

There are numerous other benefits that chatbots bring to the table. Cost saving is achieved by reducing human intervention via chatbots. The development and maintenance of Chatbot are fairly easy. They involve simple coding, cloud storage and can be easily sustained by online channels. From a productivity point of view, chatbots allow banks to allocate resources for more productive tasks rather than handling repetitive customer queries. Besides, Chatbots have automated responses and basic contact points that direct the user to a targeted solution.

Globally, chatbots are now being leveraged for Fraud Minimization and providing a better customer experience.

Ally Assist, the chatbot introduced by Ally Bank in 2015 is great case in point. The bot enables expenditure analysis, payment transfers, P2P transactions, etc. EVA (Electronic Virtual Assistant), launched by HDFC helps the customers with account information like IFSC codes, branch addresses, interest rates, etc.

While we have many unsurpassed benefits of having chatbots, some roadblocks also exist. Chatbots have some persisting limitations like its accuracy depends on coding. Limited sophistication in chatbots might fail at complicated interaction. E.g., Consumer experience index 2016 by Aspect Software reveals that 86 percent of people prefer an alternative of a live agent with a Chatbot. Average chatbots can answer one question at a time. In the case of multiple inquiries, the automated responses can come off short. Usually, chatbots are programmed to produce standard responses and hold a rudimentary conversation. For complex requests, human intervention might become essential.

Nevertheless, Chatbots are predicted to save global banks USD 8 billion yearly, by 2022 (Juniper research). To leverage the true potential of this technology, banks are now looking at advanced features such as Facial Recognition where click-less transactions can be done via Chatbots. Another area of focus for banks this year will be Speech Advancement and natural language analysis, which can make conversations more humane and can create an amazing experience. Replacing plain greetings with customized plans and presenting them with virtual reality may gain a better response. IoT devices can be involved with chatbots to enable voice communication. A great example is Clinc by USAA.

To sum up, Chatbots have revolutionized the banking experience to a larger extent. Some restrictions may persist but their demand inspires the developers and banks to create smarter versions. 67 percent  of businesses believe that Chatbots will outrun mobile apps in the next 5 years, a Medium Corporation survey predicts. This change does not seem to be far now.