Cornerstone Report Takeaways: The Banking Chatbot Journey

A group of people making friends with a robot

Increased regulation and compliance requirements, changing consumer preferences and behaviors, and the growing adoption of fintech and digital payment solutions continue to disrupt traditional banking and payment systems. The recent development of large language models like ChatGPT has taken the financial services industry by storm –  these AI-powered tools improve customer service, fraud detection, risk management, marketing, and more.

Recent Cornerstone research shows that 50% of financial institutions are currently challenged by staffing and retention issues, and nearly a fifth of surveyed banks plan to develop a digital transformation strategy this year. This strategy often centers around technology like chatbots or intelligent digital assistants (IDAs) that augment overburdened teams and move customers along their digital engagement journey.In the first few months of 2020, right before the COVID-19 pandemic, only 5% of mid-size banks and credit unions had deployed chatbots. By the beginning of 2022, chatbot deployment grew to 19%. That number is only expected to grow.

Conversational AI & Personalized Digital Transformation

Conversational artificial intelligence (AI) refers to a technology that empowers computers to comprehend and react to human language in a natural and human-like manner, supporting the development of applications and services that interact with individuals through text or speech, like chatbots or IDAs. This kind of AI collaborates closely with human workers to facilitate communication and improve overall productivity.

Many financial institutions realize that customers desire this kind of interaction from their bank, specifically because they want:

  • Speedy response time
  • Immediate access to financial information
  • A personalized digital approach to customer service and engagement

This last piece may be the most crucial, as a Financial Brand article reported that only 6% of banks deploy advanced personalization techniques when providing financial guidance through digital channels. This has led to a “personalization gap” between what consumers want and what financial institutions deliver. 

The main challenge lies in technology, not personnel, and financial institutions should work to close this gap by having “pertinent conversations” with consumers tailored to each channel and relationship type. Effective personalization is made possible by an intelligent digital assistant that integrates content-based and collaborative methods to move customers and members along their financial journeys.That’s why financial institutions have an imperative to make intelligent digital assistants an integral part of their brand and channel marketing strategies.

Chatbots vs. Intelligent Digital Assistants

We’ve previously shared about the various ways in which IDAs differ from chatbots, but they essentially boil down to three primary differences: 

Knowledge Base 

Chatbots can only pull from a limited bank of answers, providing a simple, single-turn solution to customers. IDAs come pre-trained with knowledge from a wide array of financial situations and use natural language understanding to suggest topics of interest and offer personalized information about topics like spending habits and credit score improvements. 

Some of the world’s largest banks and community financial institutions deploy KAI’s digital assistants, such as KAI Consumer Banking, which comes pre-trained with hundreds of initial conversational intents.

Resolving vs. Advising 

IDAs come pre-integrated with a variety of financial data sources and service applications in order to offer personalized recommendations and insights that help customers make smarter financial decisions, whereas chatbots are limited to answering transactional questions or pushing customers onward to human intervention. 

KAI’s digital assistants combine efficient self-service with expert banking assistance to provide customers with a personalized, conversational experience delivered in a digital format.

Future Growth

While chatbots have been criticized for their limitations, IDAs drive growth by reducing servicing costs, guiding customers through interactions, and encouraging them to explore additional engagement options. 

The KAI platform powers IDAs that can handle more than 90% of consumer interactions without human intervention and increase engagement by 4x, leading to revenue growth.

Integrating IDAs with Your Teams

Designing and introducing an IDA to your teams doesn’t have to be as intimidating as it may sound. In fact, an IDA can be fully onboarded within 30 days via three main steps. In the Cornerstone report, Ron Shevlin delves into each of these and gets industry leaders’ opinions on what it was like to recruit and hire a new AI-based member of their human teams.

#1. Onboard and Train the IDA

Onboarding creates the IDA’s personality, establishes its importance to your brand, and helps you communicate the IDA’s role and objectives to human employees. Engaging personnel from different functional areas is also critical to the IDA’s success.

Training employees on how the IDA works and training the IDA itself about your institution’s unique community, needs, and opportunities can fully flesh out the IDA. 

#2. Assign Managerial Responsibility

Intelligent digital assistants can’t exist in a complete vacuum – they need some form of human oversight to ensure they operate correctly. 

As you would with a human employee, assign someone to create a development plan for the AI teammate, watch over its progress, and make adjustments and tweaks along the way. 

#3. Create a Professional Development Plan

While IDAs do quickly become productive team members, it’s essential to consider their long-term strategy and goals. As you work to get them on the job fast, be sure to also consider how they can have the biggest sustainable impact on your business. 

Map out the desired digital consumer journey, and think about how your IDA can add the most value. Whether it’s in optimizing service, sharing financial knowledge, or helping to drive growth, it will be important for your human teams to know how best to leverage the skills of their new teammate.

Ready to Fully Engage Your Customers and Members?

Intelligent digital assistants are a key component of a digital transformation strategy that helps your financial institution do more with less, supports overloaded staff, and moves your customers along their digital engagement journey. 

Download the full report to get the full details of how you can make an IDA an integral part of your financial institution’s team. 

Interested in going beyond the research? Watch our recent webinar featuring Ron Shevlin from Cornerstone Advisors with guests from MeriWest Credit Union and IU Credit Union.

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