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Good customer service is like a good handshake — it's firm, reassuring, and makes you feel like you're in good hands. Just like a weak handshake can leave you uneasy, a bank with poor customer service can make you feel undervalued and insecure. But when a bank goes above and beyond to provide exceptional customer service, it's like a warm embrace – you feel appreciated, heard, and supported.
Financial institutions must invest in digital transformation, adopt flexible methodologies, and leverage AI, including chatbots, to effectively support their customers and stay competitive. Conversational interfaces can give customers quick and convenient access to information and services. They can also help them connect with a proper representative when their problems require a human touch.
If you want to understand the needs and challenges of the banking industry and learn how to use AI agents to achieve better business results, read on.
🤖 Would you like to offer better and faster customer support?
The problems of digital banking
Banks struggle with a high volume of support inquiries, changing customer behavior, low customer satisfaction, or the pressure to innovate.
Banking and financial services must deliver timely and personalized customer service to stay in the game. However, traditional banking methods are time-consuming and might be frustrating for the customer, especially if they must wait long to resolve their issue.
It's no secret that customers want banks to solve their problems immediately, as money is a delicate issue. Therefore, when the customer's financial situation is unclear due to the lack of communication from the service provider, they get distressed.
An excellent example of how vital customer satisfaction is for a financial institution is the case of my colleague whose bank account was recently blocked. Due to no response from the service provider, my colleague became angry and posted negative comments about the bank on social media. The post went viral as other dissatisfied customers commented on it. Once the bank became aware of the thread on social media, it solved the case. However, the company got negative customer sentiment due to poor customer service, which has damaged its reputation.
I bet my colleague wouldn't have waited so long for resolution if banks didn't struggle with another issue — managing and processing a large volume of transactions simultaneously.
Financial institutions deal with millions of transactions each day. Manual processing leads to errors and delays, which can be costly for the bank and its customers. To improve their speed while keeping the high quality of their services, banks must incorporate artificial intelligence automation and combine it with the human touch and expertise.
What are banking chatbots?
A chatbot is a computer program that simulates human conversation through text or voice commands. More advanced bots can use natural language processing (NLP) to understand and respond to customer queries and machine learning algorithms to learn from previous interactions and improve their responses over time.
Chatbots can transform the banking industry by providing a personalized customer experience while helping banks manage and process transactions more efficiently. AI conversational agents can handle up to 80% of routine customer support tasks, such as answering account balance inquiries or transaction history requests.
Benefits of using chatbots in digital banking
1. Offer personalized customer service
One of the primary benefits of using banking chatbots is their ability to provide personalized customer service. Personal banking chatbots can be programmed to understand customer preferences and provide tailored recommendations based on the customer's spending habits and transaction history.
For example, a chatbot can suggest a credit card with a lower interest rate to a customer who frequently carries a balance on their current credit card. It can also predict what products the client might be interested in based on customer data or their spending habits.
Moreover, you can use an artificial intelligence bot to provide real-time customer support and answer clients' questions about account balances whenever needed. That can improve customer satisfaction and help retain customers who may otherwise switch to competitors with better customer service.
2. Manage transaction processing
A financial institution can use banking chatbots to automate routine tasks, such as processing transactions or transferring funds between accounts. By reducing the need for manual processing, you can also let the customer service representatives focus on more complex issues and building client relationships.
3. Prevent fraud
Digital banking fraud is the plague of our time. Almost everyone knows someone who fell victim to scammers. But the customers are not the only ones who suffer from it. Data shows that up to 5% of corporate revenue is lost to financial fraud every year. Because of that, banking corporations must introduce plenty of safety measures to keep their customers' accounts safe. One such measure is using chatbots.
Banking chatbots can monitor customer transactions in real time. As they can learn about the customer's spending habits, they can detect unusual payments and alert the client about potential fraud. Then, the bot can also guide the customer on securing their bank accounts or cards.
4. Educate customers
Oftentimes, financial products are challenging to understand, plus customers don't always know how to find information about them. To address that problem, banks can use chatbots. Conversational agents can educate customers about financial products and procedures and help them find answers to specific questions.
Moreover, an AI chatbot can provide personalized financial advice based on the client's transaction history and spending habits. For example, a chatbot could provide tips on how to save money or suggest ways to reduce credit card debt based on a customer's balance history. They can also provide investment advice and help customers manage their portfolios.
5. Send reminders
Paying bills on time helps sustain a healthy credit score, manage expenses, and avoid additional charges for late payments. However, some customers simply forget to make their money transfers on time. That causes trouble to customers and financial companies.
You can get rid of that problem by using AI. Banking chatbots can send your customers timely reminders that can help them remember to settle their financial obligations. This way, you can help your customers make positive habits and support them in managing their finances.
6. Lower employee turnover
Human agents that constantly have to answer repetitive questions experience decreased productivity and job satisfaction. Due to that fact, this professional group resigns from their job more often than other groups – the turnover in call centers ranges from 30% to 45%.
Banking chatbots can help alleviate this problem. The artificial intelligence bot can take over simple inquiries, freeing your employees to focus on more complex and challenging tasks that boost motivation and efficiency.
Additionally, when the support agents successfully resolve more complicated financial issues, they feel a greater sense of accomplishment. Satisfied agents are not only more productive, but they're less likely to quit.
7. Upsell and cross-sell
As banking chatbots can keep an eye on your customer's transactions, you can use them to suggest to the customer other products they might be interested in based on the current transaction.
For example, if the customer buys a plane ticket, a chatbot might suggest getting travel insurance or opening a foreign currency account. Data shows that banks that use chatbots in their customer service can increase their revenue by up to 25%.
8. Learn about customer sentiment
Sentiment analysis is a technique that allows businesses to gain valuable insights into their customers' thoughts and feelings. It includes analyzing social media posts, reading customer reviews, and also chatbot conversations. You can monitor customer opinions, improve your products, or prioritize customer service concerns by analyzing customer sentiment.
NLP (natural language processing) chatbots can help you detect customers' emotions and attitudes toward your banking experiences. They can help you determine what your customers expect from you and respond to these needs adequately.
🤖 Would you like to offer better and faster customer support?
Over to you
As you can see, chatbots can help the banking industry overcome challenges such as employee overload or the need for personalized customer service. They can also enhance customer experience and help retain customers.
By combining conversational banking chatbots with human expertise, you can create a better workplace for your team and more efficient customer service processes for customers. This way, you can achieve better business results and build long-lasting relationships with customers who are the core of your banking business.
