Chatbots Have Taken Over Banking, So Now What?
— February 25, 2019
- Since 2016, global banks have led a gold rush towards the implementation of automated chatbot technologies, spurred by changing consumer behavior and profit-margin expansion.
- Technologies powered by artificial intelligence require additional prudence due to the sensitive nature of financial information and transnational data.
- By focusing on conversational intent, experience and security, bank can deploy a chatbot engagement model that delivers an exceptional customer experience.
This past month, billions across Asia and the world celebrated another Lunar New Year with the arrival of the final member of the Chinese Zodiac by way of the pig — and said farewell to the.. chatbot? To suggest that 2018 was the hype year of automated conversation platforms, and whose embrace from banks was unmatched by any other industry, wouldn’t be considered far-fetched to anyone close to the technology.
The rise of the financial chatbot
Just two short years ago, only Bank of America and Mastercard were on record among financial institutions to have launched a chatbot into the wild. Since then however, the industry has witnessed a crowded introduction of automated chatbots from virtually every multi-national banking institution. Banking is ahead of the curve from other industries in respects to the deployment of chatbots to lift and automate the customer experience model.
The wide adoption of an automated chatbot technology has been driven largely by the industry acceptance of strategic cost-savings, enhanced operational efficiency, and higher engagement rates with customers and prospects. In fact, UK-based Juniper Research recently raised its cost-savings estimates for the retail, banking and healthcare sectors from $ 209 bn in 2019 to $ 7.3 bn by 2023. Gartner has even predicted that by 2020, chatbots will be handling no less than 85% of all customer service interactions at financial institutions.
In a recent Entrepreneur article, Ashish Parmar, CEO of Prismetric, provides additional clarity on why chatbot technology is becoming more valuable within the banking space. He attributes a range of factors, such as GDPR & compliance requirements, AI-driven personal finance advice, and automated conversations that appeal to Millennial and next-gen investors.
Now that they’re here, what’s next for banks?
As with any new technology, there are bound to be growing pains with the rollout of digital platforms that engage very dynamic consumers across a variety of contexts — particularly when financial transactions are the centerpiece of the conversation.
Enter the intelligent chatbot, which of course, creates an added layer of complexity: It’s an intricate software platform that’s comprised of a range of insular technologies, many of those with AI attributes, such as machine learning, natural language processing (NLP), and assumptive workflow automation. That has yielded to a growing concern among industry consensus around security and a degraded customer experience through loss of human interaction.
For instance, if you’ve ever engaged in a Facebook Messenger bot deployed by your favorite fast food chain or enthusiast group, then you know that the user experience can range to an alarming degree. If you haven’t, well.. consider yourself part of a lucky few. You may want to indulge yourself then, and visit Why Chatbots Fail by UX Collective, a comprehensive and rather amusing collection of terrible chatbot experiences.
How banks can deploy an effective chatbot experience
IBM provides a best practices framework combines human agents with cognitive chatbot technologies and is is designed to improve conversational banking in three distinct elements:
- Intent: Human inconsistencies that exist in everyday conversation, such as dialect, slang and misspelling, are some of the primary obstacles that a chatbot can encounter. However, if an appropriate series of workflow tactics (examples, clarifications, confirmations and multiple-choice questions) is deployed correctly through a proper UX framework, then the customer can be guided through to a deliver their intent that can be recognized.
- Experience: In addition to determining intent correctly, engagement needs to be performed in a manner consistent with the customer’s expectation. Leveraging rich media (images, photos, audio, financial data) effectively and appropriately is critical to maintain a superior experience.
- Privacy & Security: Naturally, what separates chatbots within a banking context from other industries is the need for secure environments in which clients can conduct transactions and other financial queries, particularly if the conversation originates from a third-party location, such as social media sites. Different techniques, however, can seamlessly pivot the dialogue back to owned assets. These include account linking, invoking mobile banking, and secure web pages.
As cognitive conversation platforms continue to innovate and mature, banks who can deliver a truly-seamless conversational experience will be able to deliver on brand promises and rise above their competitors — null and void of the hype.