As published in Bank Director
Everywhere you look, artificial intelligence is dominating the headlines. In financial services, it has been heralded as a way to make major advancements in cybersecurity and compliance, but in actuality, it’s capable of much more. Conversational AI—using virtual assistants and smart bots to engage in intelligent conversations with customers—is poised to be one of the most impactful areas in the financial services industry.
In a highly regulated industry built on core legacy banking systems, strategically leveraging the latest technology can be a challenge. However, the banks that adopt conversational AI will gain a competitive advantage by unlocking the ability to solve their most strategic problems.
Here are five ways conversational AI engages your customers while driving business results:
1. Create an engaging and differentiated customer experience.
Banks today have a differentiation problem. According to the research firm Forrester, one-third of customers say all banks are essentially the same. In an effort to pull away from the pack, it’s critical for banks to create personalized experiences that surprise and delight their customers, making them feel like a valued individual rather than a collection of account numbers.
Conversational AI platforms can be implemented to fulfill customer requests, solve problems and predict customers’ needs in ways that are as natural as texting a friend. In addition to this, some of the more advanced bots support omnichannel delivery, making it possible to interact with customers anytime, anywhere and allowing them to engage on the channel they most prefer, whether it’s voice or text.
2. Change your relationship with customers from money mover to money manager.
Traditional banks aren’t the only sheriffs in town. Digital-first challenger banks and fintech companies have burst onto the scene, providing modern experiences and championing customers’ financial well-being. Although this altruistic mission has been associated with fintech companies, there is no reason traditional retail banks can’t work with their customers to improve their financial health and become their go-to money manager.
Financial data is the key to boosting financial wellness. Traditional banks are sitting on a treasure trove of data that can unlock insights into customers’ spending patterns and savings goals. Using AI, banks can proactively inform customers about their spending habits, how much debt they have, and where their savings and investments stand. Leveraging conversational AI means banks can transform raw data into relevant and actionable recommendations that can take the customer relationship from managing money day-to-day to helping them plan for major life moments, like getting married or buying a house.
3. Increase the lifetime value of customers.
Conversational AI also enhances a bank’s ability to build rewarding long-term relationships with customers. For example, some platforms can provide personalized recommendations with contextual offers for products and services and assist customers in making decisions about which loans, credit cards, savings and investment accounts are right for them. A branded virtual assistant gives you a vehicle to share those recommendations, and a unique opportunity to use data to proactively inform your customers and increase their share of wallet with you.
4. Decrease customer support costs.
Conversational AI can reduce costs by deflecting and triaging customer support inquiries without sacrificing the quality of the customer experience. For instance, DBS Bank’s digital-only bank, digibank, requires only one-fifth of the resources of a traditional bank due to cost-saving features such as an AI-driven virtual assistant that is the face of the bank. The assistant handles 82 percent of all customer requests in the digibank application without needing to involve customer support staff, freeing these teams to focus on the tasks that require a human touch.
5. Build trust and loyalty.
By providing their customers with proactive recommendations and helping them achieve their financial goals, banks can foster financial literacy and well-being. Conversational AI gives insights into spending, uncovering those insights to make customers more aware of their financial status and help them reach their goals. Rather than present the data in a static spreadsheet or long-form statement, AI powers human-like conversations to help build brand affinity and trust, fundamentally changing the relationship between bank and customer.