Unleashing the Power of Conversational Banking to Redefine Customer Engagement

By Dean Baker, Squad Lead, BFSI – Infobip

Conversational banking, sometimes called chat banking, refers to the use of Artificial Intelligence (AI) and chat technology to help customers conduct traditional daily banking activities via digital communications channels on a mobile device.

Dean Baker, Squad Lead, BFSI – Infobip

Leveraging mobile messaging platforms, conversational banking has ushered in a new era of seamless and personalised banking experiences, tailored to meet the unique needs and preferences of each individual.

When conversational banking is delivered well, customers get both a more convenient and rewarding service experience. In other words, conversational banking leads to improved customer experience and ultimately improved customer loyalty.

Notably it has transformed how customers engage with their banks, providing a seamless and personalised experience using mobile messaging. However, a solid foundation for any conversational customer experience today is omnichannel communications, which is the ability to reach customers where and when they want, on their preferred channels.

Through chat apps, conversational banking provides instant, contextual, and personalised communication. Clients have the convenience of engaging with chatbots or agents 24/7 over a single platform where conversation history is saved for later reference.

An important aspect of banking is the ability to seamlessly shift the “conversation” to a human agent if and when needed while having the ability to present the engagement thus far to the agent, so as not to lose conversational context.

Conversational context

For example, should the customer have a question the chatbot cannot answer or if the customer gets stuck in the automation journey, they can be transferred to an agent with the conversational context, so the agent carries on where the conversation stopped, without the customer needing to explain everything all over again.

Choice is key and the caveat to an enhanced customer experience is to have the ability to deliver conversational banking over the customer’s channel of choice with the ability to move between channels without losing the context of the “conversation”.

One of the crucial customer benefits of conversational banking using chat apps is enabling customers to reach the financial institution whenever and wherever they may be. This will help build the trust required for successful long-term client-bank relationships.

The more a customer interacts with their bank through these conversations, the more a bank understands the customer’s preferences, habits, and needs – making it easier to personalise future transactional and promotional messages.

Conversational banking also brings various benefits to financial institutions, including speeding up time to resolution of queries or FAQs and automating the collection of data. Automation in call centres not only reduces costs but also enhances customer satisfaction, as customers who have a positive experience with a brand tend to report higher levels of satisfaction.

Revenue growth

Additionally, revenue growth can be driven through upsell, cross-sell and lead-generation efforts that can be personalised through conversational banking. Using conversational banking with AI-supported chatbots can also significantly reduce agents’ time spent on real-time support calls. Financial institutions can therefore support more customers with the same number of agents using chat apps. This reduces the pressure on customer service representatives and frees them up to handle more complex customer transactions.

AI technology plays a very important role in powering conversational banking experiences, as it enables chatbots to understand customer voice or text communications and to reply, simulating actual conversations. AI uses Natural Language Processing (NLP) to allow chatbots to determine meaning from language through common data elements.

However, the key challenge for financial institutions to overcome when looking to adopt a conversational banking journey is to choose the right communications platform and partner. Communications Platform as a Service (CPaaS) and conversational AI should give organisations all the tools they need for a great conversational banking experience. However, the key is to be able to customise these tools to align with their unique use cases and understanding of what their customers want.

The disruption within the banking sector is evident, as seen by the remarkable growth of fintech startups that have multiplied sevenfold over the past five years. Traditional banks must recognise and address these emerging challenges to remain relevant and competitive by embracing digital transformation effectively and adopting innovative strategies and new technologies to position themselves to thrive.