Chatbots and virtual assistants poised to disrupt customer experience for FIs

Customer experience. In the last decade, it’s moved from operational afterthought to strategic differentiator, with brands like Zappos and Amazon setting a high bar for all industries.

Consumers and businesses now expect:

• 24/7 availability

• Immediate answers

• Personalized service

• Tailored recommendations

• Access via phone, web, apps, live chat—even voice assistants like Siri and Alexa

Chatbots and virtual assistants are among the technologies powering this revolution. These conversational interfaces leverage artificial intelligence (AI) to understand, learn and interact like a human.

More than half of companies have already invested in some form of the technology.¹ Thanks to advances in natural language processing (NLP) and machine learning platforms, it’s become so prevalent that analysts predict by 2020, you’ll be more likely to have a conversation with a chatbot than with your spouse.²

Here’s a closer look at the opportunity—and the reality—for banks and credit unions.

Faster, more personalized service

Chatbots and virtual assistants hold great promise for financial institutions (FIs). Today’s applications can reduce wait times, resolve repetitive inquiries and “converse” in a variety of languages. 

Organizations that implement AI for customer service or sales report:

• Greater customer satisfaction 

• Up to 70 percent fewer call or email inquiries

• 33 percent savings compared to a call with a live agent 

• 30 percent higher sales conversion rates with prospects1

A well-designed interface can respond to inquiries instantly—around the clock—and provide the same experience across communication channels. Unlike humans, chatbots and virtual assistants easily remember customer preferences. They readily leverage sales and transaction history to recommend new services. 

Already, chatbots and virtual assistants can address simple requests, such as:

• What is the current balance of account XYZ? 

• Transfer $300 from checking to Vendor B right now

• Find a copy of my April 2019 statement 

• Where is the nearest ATM?

• What is my credit card limit? 

A bold, voice-driven future

Tomorrow’s technology shows even more potential, particularly for financial guidance and cross-sell opportunities. These next-generation tools will analyze large amounts of data, provide real-time insights and initiate action on their own—everything from recommending products to suggesting efficiencies. 

Instead of pop-up notifications or banner ads on the customer portal, a chatbot might greet a customer by name and by voice, then initiate a conversation based on that individual or company’s transaction history. For example:

“Joe Treasury, I see you sent five international wires last week. Did you know other electronic payment options are available at less cost?” 

The interface could complete simple upsells on its own, or transfer warm leads to a banker for further discussion.

Large banks take charge; midsize FIs more cautious

US Bank, Wells Fargo, JP Morgan and other market leaders already have conversational applications in the market. While most target retail banking, the race is on to support commercial banking customers.

Midsize and community FIs are more cautious. While 41 percent have discussed chatbots, just two percent have actually implemented a solution; only 11 percent plan to invest in the technology in 2019.³

Detractors worry about the technology’s readiness, as well as its impact on banking jobs like tellers, customer service agents and loan processors. Chatbots and virtual assistants will automate many manual, redundant activities. However, AI also creates jobs, especially higher paying positions for programmers and data scientists. Simultaneously, it frees bank staff to focus on more sophisticated, value-driven work.

A recent survey of bank employees found little fear of conversational machines. Two-thirds expect AI to improve their work-life balance, while over half believe it will enhance their career prospects.4

In the end, it’s customers who will decide the future of conversational interfaces, based on their willingness to interact with chatbots and virtual assistants. Done right, there’s ample opportunity for AI to increase customer convenience—and free staff for stronger, more valuable engagements.

Editor's note: Always consult with legal counsel to understand your obligations before adding a chatbot to your website.

Sources & Further Reading

¹Gartner. (2018, February 19). Gartner Says 25 Percent of Customer Service Operations Will Use Virtual Customer Assistants by 2020. Gartner. 

² Hinds, R. (2018, April 2). By 2020, You’re More Likely to Have a Conversation With This Than With Your Spouse. Inc.

³ Cornerstone Advisors. (2019). What’s Going On In Banking 2019. 

4Manning, J. (2018, July 4). How AI Is Disrupting the Banking Industry. International Banker.

This content is accurate at the time of publication and may not be updated.