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The banking industry is constantly evolving to improve the customer experience, whose demands and expectations are also increasing and changing over time. How will new technologies impact conversational banking this year?
When it comes to interaction with digital services, customers have the bar set very high. The global expansion of apps such as Netflix, Amazon, and WhatsApp has increased users' expectations regarding usability, attention, and service.
Over the last few years, people have become highly sophisticated digital users. E-commerce, entertainment, and messaging have made great advances in the experiences they offer to users through digital platforms.
These new models have meant that historically traditional or inflexible businesses and industries are being forced to offer the same degree of digital experiences, simplicity, management, and quality of service that they demand from digital companies.
While financial companies have realized in recent years that if they want to be successful they must increasingly understand their users and deliver the digital experience they want, most still have a long way to go to catch up.
Conversational banking has a lot to contribute to closing the gap between users' expectations and the quality of the services they receive.
But let's start at the beginning.
Main digital challenges for banks in 2023
The rapid advancement of technology over the last decade, coupled with the massification of digital platforms, has allowed banks to capture larger amounts of data from their users.
By obtaining thousands of behavioral data and transforming them into information, decisions became more informed, effective, and efficient. Those who were able to adapt were encouraged to invest, test and innovate, they were able to take greater advantages because their choices were better supported.
But not all markets are in the same state of evolution. The degree of maturity of digitalization is as diverse as the number of banks that exist. This makes things more challenging, as customers have ever higher digital expectations and expect their bank to live up to them.
Nevertheless, it is still a huge challenge for many banks and financial institutions to carry out achievable innovation processes that contribute to their business objectives and increase customer satisfaction.
While each case is unique, most banks face similar challenges when they want to tackle the digital transformation process, such as:
- Lack of methodology and holistic vision of the transformation process;
- Erroneous KPIs, both for setting objectives that are not very concrete, as well as very ambitious and impossible;
- Poor use and management of available resources;
- Too much bureaucracy, slower processes, and inefficient procedures;
- Lack of knowledge and experience to carry out a digitization process.
Related Article: Strategic challenges moving from home banking to conversational banking
Conversational banking: why is it increasingly important?
Conversational AI uses interfaces such as chatbots and voice assistants to help banks with support and customer relationship tasks.
Conversational banking solutions work on multiple existing platforms, such as WhatsApp, Instagram, and Facebook Messenger. Thus, users can interact with their bank or financial institution through a natural language conversation, instead of traditional channels such as phone calls or visits to a branch.
Another great advantage is that it allows 24/7 access to financial information and support, offering customers the ability to check their account balances, make transfers, pay bills, and receive personalized recommendations.
The use of conversational interfaces has grown significantly in recent years in banking, as it helps to improve the customer experience by reducing waiting times, providing fast and convenient access to information, and offering a more personalized and efficient service.
In addition, conversational banking provides concrete solutions to solve the following challenges:
- Difficulties in retaining customers.
- CLV problems and high customer acquisition costs
- Increased expectations of banking customers
- Increased competition from fintech, digital banks, and neo banks
- High bureaucratic barriers and processes that impede transformation
- Vast amounts of regulations, standards, and certifications to comply with
Key UX trends for conversational banking.
As we have already seen, banks will focus their efforts on creating personalized and seamless experiences for customers. What are those trends that this year will collaborate in the development of conversational banking?
New forms of interaction
Conversational banking adds new communication channels and perfects existing ones. In this sense, AI solutions for video conversational, voice, chat, and automated telephone will continue to expand rapidly.
Video Conversational AI, for example, will allow customers to interact with a virtual assistant via video chat. They will be able to have a more human and empathetic experience, as they will receive real-time face-to-face support from a bank representative.
Meanwhile, voice-based technologies - which make it easier and more convenient to access information and support - will give rise to a new class of assistants in 2023: virtual personal bankers.
In 2023, conversational banking is becoming more personalized, with conversational chatbots and voice assistants that can understand each customer's individual needs and preferences.
This is made possible through the use of advanced AI and natural language processing (NLP) technologies, which enable chatbots to understand customer intent and respond accordingly.
Personalized conversational banking experiences will give customers a sense of greater comfort and confidence in their interactions with technology.
In addition, through improved contextualization, conversational banking will become more aware of each user's particular context, which will help make conversational banking experiences more relevant and valuable to customers.
Conversational banking will integrate with a variety of platforms, including messaging services, voice assistants, and mobile banking apps.
These integrations will make it easier for customers to access their banking services without having to navigate through multiple channels through a unified experience, regardless of the platform they choose to use.
Increased security and privacy
Cybersecurity attacks will continue to be on the agenda, regardless of industry or sector. Conversational banking is not exempt from risks, so security and privacy measures will continue to be among the priorities.
In this regard, banks should invest in certified and approved solutions, such as the Aivo Suite, to ensure that customer data is always protected from threats.
The customer, at the center of decisions
Taking the user experience seriously allows different benefits for banks.
Cost reduction through automation and self-management
The evolution of conversational assistants has evolved tremendously in recent years, allowing companies to automate repetitive and low-value tasks in a fast and scalable way.
Thanks to the combination of messaging and automation, banks can open up new communication channels, such as WhatsApp; as well as handle larger amounts of messaging and support without the need to hire more staff.
This approach to automation does not mean doing without people, but rather freeing them up to focus on more intellectually meaningful and challenging tasks and professional development, and they can also be more efficient in their tasks.
Takes less time to problem solving
Banking customers expect (and want) concrete and quick answers to simple questions. In this sense, conversational banking can resolve more than 90% of queries in less than two minutes.
Moreover, by being able to resolve their concerns and problems themselves, they feel more empowered, which increases their level of satisfaction.
Faster resolution of urgent problems
Thanks to conversational banking, customer security also increases. AI tools that incorporate solutions such as Aivo's notify customers immediately to take action if suspicious movements are detected. That way, users and their finances are better protected.
Reducing customer churn and increasing engagement
Conversational banking can resolve most customer queries within minutes, which not only translates into cost optimization but also customer satisfaction.
This is vital for the business, considering two complementary factors. On the one hand, it is well known that for companies in general the cost of customer acquisition (CAC) is very high. On the other hand, retaining existing customers is more economical and leads to increased profits.
Conversational banking plays a key role here in solving both sides of the same situation because if customers are satisfied, they are more likely to choose to stay.
Happier employees, more efficient companies
Customer service work has always been a demanding and high-turnover job. These permanent changes in the workforce have been, from an organizational point of view, a major challenge for banks.
Now, thanks to conversational banking, people can focus on doing more meaningful work because they have more time and less wear and tear. This allows them to improve their skills and concentrate on more rewarding issues. In turn, this makes it easier for companies to be more attractive when it comes to attracting and retaining talent.
Increased SLA (Service Level Agreement) compliance
By reducing first response times and automating the major workflow, service performance and compliance are significantly increased.
Implement a conversational banking strategy by 2023
As we have already seen, conversational banking has a lot to offer banks and their customers. It represents a huge opportunity for innovation, which quickly translates into greater efficiency. We invite you to schedule a demo with our specialists to learn more about how these trends can help you lead the transformation of your business.