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FinTech: Reimagining Financial Services with Chatbots

chatbots in banking industry
Digital Transformation

FinTech: Reimagining Financial Services with Chatbots

A huge amount of money, resources and time are spent by banks in Know Your Customer (KYC) process, across the world. It is indeed a painful process involving several steps of interaction in the B2B segment.

But, not anymore.

The entire process can be completed in a matter of minutes, thanks to Bot technology. Customers can provide required information interacting with a chatbot, which would verify it against the bank’s systems as well as a third-party database through an API. And that’s it!

What makes the chatbot technology attractive to customer interaction intensive industries like Banking & Financial Services is the automated self-service, together with the ability to escalate to a human agent in complex situations?

According to Gartner, twenty-five percent of customer service and support operations will integrate virtual customer assistant (VCA) or chatbot technology across engagement channels by 2020.

What’s a chatbot?

A simple transactional chatbot can execute a few specialized processes that replace the need to talk to an expert or interact with mobile apps or websites. A more advanced chatbot can support multiple processes at the same time and can also help the user make decisions. Essentially, the chatbot is an Artificial Intelligence powered virtual assistant that is trained with large amounts of data to produce a response as an expert.

In the last couple of years, chatbots have evolved from sounding robotic to more natural, mimicking human agents. Thanks to Natural Language Processing (NLP), chatbots can speak the language of the customer and help her/him perform a set of operations connected to enterprise systems.

In a typical banking scenario, the chatbot can virtually manage a set of standard transactions across different operations, eliminating the need of the bank’s staff to deal with every individual customer and rather focus on exceptions. Now imagine the boost in productivity and efficiency for the staff.

Well, customer on-boarding is the obvious use of chatbots in banking & financial services. Are there any other use cases?

Of course, there are a few more to add to the list.

Making omni-channel banking cost-effective and consistent

With new age financial services companies and FinTech companies giving a run for their money, banks are in a race to get in front of and engage with their customers in new ways. While using several channels to engage with the customers is fast becoming the norm, the challenge is in getting the right value out of each channel.

Instead of developing communications solutions for each channel like website, mobile app, Text Messaging service, automated emails, social media messenger, etc., banks can now develop a single bot that can ride across the platforms offering a holistic communication channel across all platforms. Quite simply, the customer can choose the channel that suits them but will get the same experience.

Making compliance easy

Beyond the transactional realm of compliance as in the case of KYC, chatbots can also help in making compliance with complex requirements 2X faster and easier. For example, in the UK, the new GDPR regulation entails recording & reporting of specific time and date of receiving consent from the individual for the processing of her/his personal information. Think about this.

Instead of asking an employee to check multiple systems/databases on when the bank received the email communication from the individual customer giving the consent, you can simply ask this question to a bot, which has been trained on this data and querying. Bot technology complemented by distributed computing enables the bank’s staff to meet more complex compliance requirements much faster and reduce the cost of compliance.

The best part – customer engagement

As indicated above, the competition in Banking & Financial Services is red hot. Like Retail, personalization has become a crucial differentiator in banking. Beyond the efficiency of transactions, customers now want the bank to know them and offer them personalized services.

While the systems are sophisticated enough to capture knowledge on each individual customer, the time required to be spent by the customer service representative to understand, interpret and offer personalized service is a deterrent. A dedicated banking chatbot can deliver the same service like cross-selling, personalized advice, and remembering preferences, at a fraction of the cost and in real time.

In reimagining the enterprise desk, EY speaks about the significant benefits of chatbots as

  • Reduced operational pressures: Chatbots answer repeatable queries and questions that call center or salesforce would handle.
  • Low IT operating cost: Low price point combined with options to reduce mobile application expenses; this is not IT labor intensive.
  • Broad applicability across the organization: Repeatable processes across the organization benefit from becoming tenants on a chatbot platform.
  • Continuous improvement: Analytics expose areas for continuous improvement to conversations and new use cases.
  • Driven by end-users: The ultimate consumer drives the conversation in ways they are familiar with a low learning curve.
  • Personality: Organizations decide on the personality and human qualities of the bot.

Recognized as one of the “20 most promising digital transformation solution providers 2018” CIOReview (November 2018), Hakuna Matata is focused on helping enterprises across industries explore and adopt emerging technologies for gaining efficiencies, engaging customers better and acquiring a competitive edge.