How Chatbots Are Transforming Customer Service in Finance?

Chris Crombie, Product Manager, Engage Hub

Investment in chatbots is increasing year on year. So much so that a recent Oracle survey found that by 2020, 80% of businesses will be using them.

This is largely due to customers’ growing preference inconversational platforms. According to recent research by Accenture, messaging apps that utilise voice and text-based interfaces are becoming the preferred method of engagement for digital consumers. It’s no surprise, then, that a growing number of financial organisations are beginning to take note.

Put simply, chatbots are Artificial Intelligence (AI) powered, conversation-mimicking computer programmes that can carry out tasks for customers in a timely, on-demand and user-friendly way. In finance, they can provide real-time banking updates, send notifications to inform of fraudulent behaviour and also answer any customer queries, like balance checking, in a similar manner to how a human customer service provider would – yet in many instances, faster and with greater accuracy.

The technology behind chatbots

Chris Crombie

Chatbots are comprised of an extension of AI, Machine Learning (ML), and Natural Language Processing (NLP). ML is the application of AI in ways that utilise big data and analytics to learn and respond automatically, improving how the chatbot handles queries over time. NLP is a branch of AI that enables computers to understand human language as it is spoken and written, with the aim of understanding intent.

During the process of implementing chatbots in any industry – not just the finance sector – it is key that they are rigorously tested internally before being made available to customers. This could be by deploying the chatbot in the call centre first, to allow the chatbot to learn from staff, and therefore enable it to pick up on how a wide range of customer queries are dealt with. Internal testing will ensure that chatbots work as efficiently as possible and, importantly, that they provide the correct information to customers when they demand it.

Chatbots for every size

Many start-ups and FinTech innovators have adopted AI-based methods to communicate with their customers at a scale that belies their size. For example, Kasisto introduced a conversational AI platform, KAI Banking, to fulfil requests, predict customers’ needs and improve performance. Customers are able to communicate with its banking bot ‘Kasisto Kai’ on platforms such as Facebook Messenger, SMS and Slack. The smart bots are able to respond to customers in real-time, producing answers, completing complicated requests and making predictions.

Even traditional banks with longstanding customer service practices and methodologies, have undergone a technical and cultural overhaul to keep up with smaller, more flexible companies –  implementing AI conversational tools as part of this changing dynamic. In 2016, Bank of America introduced advanced virtual assistant, Erica, to help customers make smarter decisions. Erica can advise customers on how they can save money, report on FICO scores and encourage them to pay bills. More recently, HSBC Holdings, Standard Chartered and Hang Seng Bank announced plans to launch chatbots to serve customers.

As well as improving customer service, a report by Juniper research found that the technology will save global banks more than $8 billion dollars by 2022 by reducing call volumes as a result of providing customers with the ability to self-serve. The same report also estimated that a chatbot inquiry will save approximately four minutes compared to traditional call centres. Additionally, while there will be costs to implement – as with any technological implementation – the AI involved is now accessible to all organisations. This, coupled with advancements in analytical tools and ML, means that AI will provide more intelligent interactions, lowering the cost of repetitive customer support tasks.

The conversational customer appeal

It is interesting to ask why, as consumers, we are attracted to the idea of chatbots – something that can largely be explained by the rise of conversational platforms. The widespread public acceptance of messaging apps such as Whatsapp, Facebook Messenger and WeChat was highlighted last year when they overtook social media networks for monthly active users. And AI is already built into these apps – Facebook Messenger, for example, has 33,000 bots available within the system that offer customer support and guidance.

As a society, we are ‘always on’, requiring answers on demand and looking for issues to be resolved quickly and efficiently. Therefore, the appeal in these messaging services – and by extension chatbots – is that they are simple, intuitive and give us what we want quickly.

In the banking industry, chatbots mirroring the services customers use in their daily lives are beneficial for a few good reasons. They are a way to provide 24/7 customer service that runs smoothly during peak times, avoiding the wait periods experienced with call centres. Unlike human interactions – speaking to different people on the phone – these services can also be personalised to the customer that is interacting with the chatbot, a result of the combination of big data, advanced analytics and predictive models involved.

Attracting and retaining customers

With the introduction of PSD2, Fintech startups and challenger banks are stealing market share from more traditional enterprises. These companies can quickly implement the latest technologies to deliver a seamless level of customer experience. Put simply, customers expect a high standard of customer service from their banks – when this is poor they now have various options to look elsewhere are never return.

In order to retain customers, resolving issues quickly and efficiently is crucial, especially when it comes to banking. A recent study by Engage Hub – exploring the fragile nature of customer experience– uncovered that good communication is the top factor for improving customer experience in the financial industry. It goes without saying that customers need to be assured that their money in personal accounts is being kept safe and that they are kept up-to-date on investments and shares. The ability for chatbots to provide accurate and efficient customer service all day long, has meant they are becoming a trusted ‘face’ for businesses, ensuring swift conflict resolution and efficient services.

Chatbots are here to stay and are transforming the finance industry as we know it – whether that be for small start-up banking applications or global banking organisations. The opportunity to gain competitive advantage through delivering those streamlined, personalised services that customers crave, can be achieved through these AI conversational platforms. And, with increasing developments and improvements to the technology itself, the future is looking bright for chatbots in the finance industry.

Chris Crombie, Product Manager, Engage Hub

Investment in chatbots is increasing year on year. So much so that a recent Oracle survey found that by 2020, 80% of businesses will be using them.

This is largely due to customers’ growing preference inconversational platforms. According to recent research by Accenture, messaging apps that utilise voice and text-based interfaces are becoming the preferred method of engagement for digital consumers. It’s no surprise, then, that a growing number of financial organisations are beginning to take note.

Put simply, chatbots are Artificial Intelligence (AI) powered, conversation-mimicking computer programmes that can carry out tasks for customers in a timely, on-demand and user-friendly way. In finance, they can provide real-time banking updates, send notifications to inform of fraudulent behaviour and also answer any customer queries, like balance checking, in a similar manner to how a human customer service provider would – yet in many instances, faster and with greater accuracy.

The technology behind chatbots

Chris Crombie

Chatbots are comprised of an extension of AI, Machine Learning (ML), and Natural Language Processing (NLP). ML is the application of AI in ways that utilise big data and analytics to learn and respond automatically, improving how the chatbot handles queries over time. NLP is a branch of AI that enables computers to understand human language as it is spoken and written, with the aim of understanding intent.

During the process of implementing chatbots in any industry – not just the finance sector – it is key that they are rigorously tested internally before being made available to customers. This could be by deploying the chatbot in the call centre first, to allow the chatbot to learn from staff, and therefore enable it to pick up on how a wide range of customer queries are dealt with. Internal testing will ensure that chatbots work as efficiently as possible and, importantly, that they provide the correct information to customers when they demand it.

Chatbots for every size

Many start-ups and FinTech innovators have adopted AI-based methods to communicate with their customers at a scale that belies their size. For example, Kasisto introduced a conversational AI platform, KAI Banking, to fulfil requests, predict customers’ needs and improve performance. Customers are able to communicate with its banking bot ‘Kasisto Kai’ on platforms such as Facebook Messenger, SMS and Slack. The smart bots are able to respond to customers in real-time, producing answers, completing complicated requests and making predictions.

Even traditional banks with longstanding customer service practices and methodologies, have undergone a technical and cultural overhaul to keep up with smaller, more flexible companies –  implementing AI conversational tools as part of this changing dynamic. In 2016, Bank of America introduced advanced virtual assistant, Erica, to help customers make smarter decisions. Erica can advise customers on how they can save money, report on FICO scores and encourage them to pay bills. More recently, HSBC Holdings, Standard Chartered and Hang Seng Bank announced plans to launch chatbots to serve customers.

As well as improving customer service, a report by Juniper research found that the technology will save global banks more than $8 billion dollars by 2022 by reducing call volumes as a result of providing customers with the ability to self-serve. The same report also estimated that a chatbot inquiry will save approximately four minutes compared to traditional call centres. Additionally, while there will be costs to implement – as with any technological implementation – the AI involved is now accessible to all organisations. This, coupled with advancements in analytical tools and ML, means that AI will provide more intelligent interactions, lowering the cost of repetitive customer support tasks.

The conversational customer appeal

It is interesting to ask why, as consumers, we are attracted to the idea of chatbots – something that can largely be explained by the rise of conversational platforms. The widespread public acceptance of messaging apps such as Whatsapp, Facebook Messenger and WeChat was highlighted last year when they overtook social media networks for monthly active users. And AI is already built into these apps – Facebook Messenger, for example, has 33,000 bots available within the system that offer customer support and guidance.

As a society, we are ‘always on’, requiring answers on demand and looking for issues to be resolved quickly and efficiently. Therefore, the appeal in these messaging services – and by extension chatbots – is that they are simple, intuitive and give us what we want quickly.

In the banking industry, chatbots mirroring the services customers use in their daily lives are beneficial for a few good reasons. They are a way to provide 24/7 customer service that runs smoothly during peak times, avoiding the wait periods experienced with call centres. Unlike human interactions – speaking to different people on the phone – these services can also be personalised to the customer that is interacting with the chatbot, a result of the combination of big data, advanced analytics and predictive models involved.

Attracting and retaining customers

With the introduction of PSD2, Fintech startups and challenger banks are stealing market share from more traditional enterprises. These companies can quickly implement the latest technologies to deliver a seamless level of customer experience. Put simply, customers expect a high standard of customer service from their banks – when this is poor they now have various options to look elsewhere are never return.

In order to retain customers, resolving issues quickly and efficiently is crucial, especially when it comes to banking. A recent study by Engage Hub – exploring the fragile nature of customer experience– uncovered that good communication is the top factor for improving customer experience in the financial industry. It goes without saying that customers need to be assured that their money in personal accounts is being kept safe and that they are kept up-to-date on investments and shares. The ability for chatbots to provide accurate and efficient customer service all day long, has meant they are becoming a trusted ‘face’ for businesses, ensuring swift conflict resolution and efficient services.

Chatbots are here to stay and are transforming the finance industry as we know it – whether that be for small start-up banking applications or global banking organisations. The opportunity to gain competitive advantage through delivering those streamlined, personalised services that customers crave, can be achieved through these AI conversational platforms. And, with increasing developments and improvements to the technology itself, the future is looking bright for chatbots in the finance industry.