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Banks aren’t using their chatbots right

Use of AI to analyze customer behaviors can help banks prepare chatbots with simple next-step workflows and enhance the user experience.

Apr 18, 2023 / Customer Experience

For many people, communicating with their bank can be stressful, and those stress levels rise when digital communication processes break down. A recent study found that two-thirds of customers are frustrated with companies before they speak with agents, often due to inefficient chatbots.

But the global chatbot market is growing for a reason – for banking, financial services and insurance alone, the sector’s value is predicted to approach $3.5 billion by 2027. So who’s succeeding in this space?

Non-financial service brands are stepping up. The growing language capabilities of chatbots today enable companies to provide complex definitions that a 5-year-old would understand. Whether it’s to differentiate a mobile network provider or to monopolize credible brands, digital-first companies are giving banks fierce competition.

Banks have tight regulations and risks to mitigate, but they also have the information to ensure they offer the best financial products. With the support of artificial intelligence and chatbot data, banks can lower risks and provide bespoke services – they just need to better understand how to apply these tools correctly and effectively for their audience.

Top-performing banks see over 30 bank app log-ins per month, roughly 50% more than the average institution. Banks perform well when their customer’s needs are met, but as the banked society grows, technology bridges the gap to provide communication channels for each individual customer.

Bank’s chatbots have the power to communicate product information, customer information, regulations and more when the right workflows are in place. Things like maintaining a minimum on credit scores and paying off unsecured loans might not be obvious to a customer, but they are to a bank.

At the same time, delaying processes cost banks valuable time and can leave customers unsatisfied with the service and without their desired products. Brands should prioritize resolving problems on the first contact, and AI has the power to make this possible.

Some 43% of customers feel more comfortable sharing data with a chatbot, jumping to 60% for millennials and Gen Z. But banks aren’t using this technology to build a contextual picture of their customers. They are missing out on improving their services and potential revenue growth as a result.

AI and chatbots today take everyone through a standard channel. There is little personalization of services from what is shared in a single chatbot interaction. However, when banks integrate multiple conversational data, they can generate unique AI profiles of customers behind the scenes.

AI-generated customer behavioral profiles can deliver a holistic view of customers while protecting their privacy. This helps banks to pre-determine what products customers are eligible for, what steps they can take to ensure qualification, and integrated chatbots can guide them on their journey.

Say the customer’s debt-to-income ratio is too high for a particular product. The individual will want to know what steps they should take to qualify. Rather than chatbots rejecting the potential loan customer, banks need to be asking: Why is it high? Can the customer pay it off in a certain amount of time? These questions collect vital data required to understand the problem.

Banks must create simple workflows for high and low-income customers to gather the context, predict their customer’s needs, and cater their products and advice accordingly. To do so, banks must close the gap between in-house data and communication with the customer.

With pre-mapped AI profiles, banks already know their customers’ financial capabilities and next steps, enabling the chatbot to ask simple questions and produce optimal scenarios. At the same time, banks can use AI to create workflows that assess their in-house products, where risk allowances lie, and ask questions that, with suitable responses, might enable them to offer certain solutions to customers.

When banks use AI to analyze their customer’s behaviors, they can identify their potential. This way, banks can prepare chatbots with simple next-step workflows, enhance the user experience, and build better products to support the economy’s financial health.

Uday Akkaraju is CEO of Bond.ai