The COVID-19 pandemic has inadvertently accelerated the pace of digitization as customers now seek online services more than ever before. Furthermore, today’s digital-native customers demand services according to their individual preferences.
While most industries face this paradigm shift in customer behavior, banks are going through the most dramatic operational changes.
With persistently low interest rates, regulatory changes, and competition from shadow banks and new digital entrants – the traditional banking business models are now critically challenged. Both the primary (maturity transformation and liquidity provision) and secondary (payment and transaction) functions are exposed to information processing and, therefore, prone to getting affected by digital disruption.
Engagement models are becoming more diverse
New technologies have added the much-in-demand ‘hyper-personalization’ factor to all banking domains like payment transactions, credit extension, and deposit collection. Enlightened and empowered customers no longer accept “cookie-cutter” treatment. The need of the hour is to rethink and remodel processes while embracing emerging technologies like banking chatbots, becoming agile, and putting customers at the center of every strategy. But before diving deep into chatbots in financial services, banks need to adapt to the new reality. Finding the right balance between in-person, self-serve, and multi-channel engagement models will play a critical role in achieving success.
- In-person: Given the kind of impact in-person banking has on customer experience and loyalty, it will surely survive the apprehension around pandemic. However, banks will need to take drastic measures to build an environment of trust and safety to reap the full benefits of in-person banking in the post-COVID era. Banks can integrate digital solutions to become as contactless and signatureless as possible. Even the recommendation of distancing of at least six feet can be incorporated in bank queues. Another method of ensuring zero-touch safety is contactless payments. To mitigate the possibility of banknotes spreading contagious viruses, contactless payments, and digital wallets can be seamlessly incorporated all across in-person banking experiences. Such steps can reassure customers and create safer environments. In-person banking can cultivate customer loyalty, drive sales, and help authenticate customers. Future banks can leverage branches as tools to build deeper relationships with customers and provide personalized and live correspondence for enriched user experience.
- Multi-channel: In the coming years, digital solutions for banks will have enduring relevance owing to the growing popularity of neobanks and fintech. By implementing digitized, remote, and multichannel customer transaction solutions, banks can limit disruption and maximize the efficiency of various processes. The channels can include branches, ATMs, call centers, internet banking, and mobile devices as well. With such an approach, banks can bring consistency, persistence, and parity to otherwise independent silos. Banks can enhance customer journeys across multiple mediums like mobile apps, SMS, messengers, website, etc. Multi-channel banking can enable personalized reach outs to more massive sets of customers, encourage communication around financial challenges, and offer advice. However, the more technology is introduced, the more questions will arise from end-customers like “How do I enroll for online bill payment?” or “How do I transfer funds?”. Instant communication enabled by self-service options can play a critical role in bridging this gap.
- Self-service: The last model enables anytime, anywhere banking which even overcomes the slow responses of internet banking or mobile devices. Self-service banking allows customers to do day-to-day banking like opening an account, depositing a check, or transferring funds from easily accessible devices and channels. It bridges the ‘conversational’ gap between banks and customers. According to a survey, 67% of respondents prefer self-service options like banking bots over speaking to a company representative. This means self-service banking taps into the massive audience base of mobile devices that are at the peak of proliferation among all kinds of customers.
While all these different models of engaging with customers have their own pro’s and con’s, there is one alternative that can bucket the benefits of all these into one – Conversational Banking.
The million-dollar question: What is the future of chatbots in banking?
Along with an unprecedented volume of customer queries, banks also need to cope up with economic uncertainty, employee absence, the collapse of risk management models, closure of branches, and pressure on the phone and digital support centers. Not only do they need to address immediate circumstances, but concurrently maintain flexibility to drive growth post-COVID19. By redesigning their digital strategy with AI-powered chatbots in banking, customer relationships can be improved and greater operational resilience can be built for the long-term.
AI-enabled conversational banking allows banks to use all kinds of channels to create more meaningful relationships with self-service capabilities (even redirecting to human operators, if necessary). They tick all boxes like contactless transactions, interaction with human personnel, and knowledge dissemination regarding complex financial questions like making transactions, blocking cards, getting account and CC statements, etc. As the world becomes ever more digital, capitalizing on conversational AI in banking opportunity could be the difference between those banks that flourish in the coming years and those that can no longer compete.