How Chatbots in Banking Helps to Drive Customer Satisfaction| HCL Blogs

Chatbots in Banking: Let’s discuss the future

Chatbots in Banking: Let’s discuss the future
March 29, 2017

The need for enhanced customer interaction

In the uber-connected business landscape, organizations are constantly striving to drive customer satisfaction across multiple touch points. It would, therefore be unreasonable to expect that a customer will patiently await his/her turn in a call queue. In fact, if that were to happen, it would significantly impact the quality of customer experience – which is exactly what a 21st century enterprise cannot afford.

Due to the hyper competitive nature of business today, there’s little by way of differentiated features that firms can offer. Consequently, brand loyalty is becoming obsolete as customers will switch at the drop of a hat. When there’s little to distinguish between various products, customer service emerges as the key value-add.

Modern-day banks are no different and are consistently looking for avenues to improve customer satisfaction. The banking industry, never the one to shy away from disruptive technology, is rapidly deploying chatbots toward that end.

The banking industry, never one to shy away from disruptive technology, is rapidly deploying chatbots

They are one of the many ways in which an enterprise can raise the bar by delivering more authentic, quicker, and reliable interactions. "Chatbot" is a condensed form of “chat robot,” a computer program that uses either a rule-based approach or machine learning to simulate human response in order to communicate with customers.

Driving customer satisfaction through chatbots

The rule-based bots have limited functionality as they only respond to a specific set of instructions. For instance, the chatbot deployed by American Express uses Facebook Messenger to answer simple questions without the help of artificial intelligence (AI). However, it’s the chatbots with AI that are projected to sweep the industry in 2017. They understand language as opposed to commands and evolve with time. It’s no surprise therefore, that everyone from MasterCard to Capital One is embracing these chatbots.

Bank of America’s chatbot, Erica, goes beyond simple queries like “check my balance” and delivers automated “conversational banking." It answers sophisticated questions like “how to manage spending and improve saving,” and even has a sense of humor. Erica introduces herself as “I am Erica” – enough to bring a smile to any customer’s face and is one of the most popular bots today.

Although chatbots promise simplicity, a host of factors – analytics, flow optimization, platforms – have to be considered in order to create a seamless experience. Consequently, it will be reasonable to assume that banks would be cautious in adopting chatbots, as even the minutest error can lead to grave regulatory problems. Complexities notwithstanding, bankers and customers have great expectations from this technology.

It’s evident that the latter will be enthusiastic at the prospect of instant gratification – the tedium arising from wait time will be eliminated. In today’s dynamic world, nobody has the luxury of spending half an hour to resolve a two-minute query and chatbots generate instant response. Organizations, on the other hand, will benefit from round-the-clock availability, without having to depend on call center executives. Consider this: a single customer transaction with an agent over the phone will cost up to $4.00, while a chatbot will push down the expense by a handful of cents.

The way forward

Cost optimization is a secondary benefit, banks that are exploring AI-powered chatbots should primarily assess them based on the quality of user satisfaction. The most successful chatbots are programmed to be more like humans and less like machines - consider the aforementioned example of Erica.

Banks that are exploring AI-powered chatbots should primarily assess them based on the quality of user-satisfaction

When chatbots are proactive – understand intent rather than command, display shades of empathy – the experience can be delightful. This is exactly the sort of experience that will reinstate customer trust and ultimately create brand loyalty. After all, the human touch is at the heart of the process of communication.

The potential offered by these bots is enormous, not only in banking but also across industries. However, delivering consistent and superior customer experience is an ongoing process and doesn’t end with chatbot implementation. Banks must, therefore, monitor developments in the technology with a keen eye and quickly replicate the ones that improve upon the existing model.