What Are Chatbots and What Do They Do?
A chatbot is an artificial intelligence-powered machine that facilitates communication through the use of chat features. The usage of chatbots is not limited to one type of industry and it can be applied to various other industries including but not limited to healthcare and banking. Chatbots provide different types of benefits including a reduction in overhead costs and improved customer experience (for both customers and agents). It also provides a personalized approach since chatbot adapts automatically to new conditions.
According to Statista, by 2022 the number of users globally for this technology will reach 6 billion. There are multiple opportunities for using this technology in banks such as reducing time spent on answering repetitive questions, lowering transaction costs with the elimination of the need for people at banks and providing accurate information on complex topics like tax returns or investments.
Why Is It Necessary to Have Them
It is no secret that the chatbot industry has seen exponential growth in the past few years. The reason being is because customer service has been revolutionized. Banks are seeing less attrition rates and more opportunities for increased customer satisfaction. However there are three very key reasons why banks should integrate chatbots as a way to streamline customer experience. Chatbots have not only been shown to decrease time spent on hold by up to 80%, but also reduce abandonment rates by up to 64%. Chatbots have already been successfully integrated into many industries, including banking - so what’s stopping them from being successful in banking? According to one study, 83% of consumers are likely to use a financial chatbot if they had an opportunity.
Role of Artificial Intelligence in the Fintech Sector
In the banking industry chatbots are used for many purposes such as screening customers and answering simple customer queries. Chatbot developments are accelerating quickly because of the benefits they offer like cutting costs and opening up new channels of communication. They can be more attentive to customers' needs with increased accuracy than human employees. Customers also get the convenience of 24-hour service without having to wait on hold or call a specific number during business hours. Additionally, chatbots improve customer service by freeing bank staff from dealing with routine tasks and giving them time to focus on more complicated requests. It has been found that even small tweaks to the conversation scripts can lead to significant improvements in response times and reduction of dialogue errors. In some cases, organizations have managed to cut down cost associated with deploying bots by 80%.
The Opportunities That Come with the Introduction of AI
As with other technological changes and breakthroughs before this one, the introduction of artificial intelligence to banking introduces with it an inherent amount of risk. Due to the fact that any new technology comes with a degree of uncertainty surrounding it's specific implications and impacts, there is always a chance for things to go awry when AI is introduced. However, this does not mean that we should not push forward with implementing AI into the banking industry- instead, we must consider how best to manage these risks as they arise.
It is important for banks to maintain their human identity in order to have a strong emotional connection with their customers and also ensure better customer experience. At times, chatbots may seem more logical than humans but it is essential for them to be able to carry out conversations naturally without scripted answers. Chatbot must be able to hold a conversation and respond naturally like humans do by understanding tone, inflection and context of the conversation.
It is important that while transitioning from a traditional system to newer ones such as chatbot based solutions people are given sufficient time or else there could be backlash which can hinder progress.
Challenges for Banks Introducing AI Technologies into Their Services
AI is the next major advancement in banking as it will help banks improve customer service and minimize human error. Banks also need to address the areas of business strategy and regulatory compliance when they introduce AI technologies into their services. Some customers may be hesitant to embrace this technology because of security concerns. A report by American Banker found that 42% of consumers surveyed said that they were not at all confident that online or mobile financial institutions could protect them from fraud.
The emergence of chatbots may offer some relief for those who are wary about having conversations with artificial intelligence. Chatbots can assist customers through basic questions without collecting personal data. However, if a chatbot gets stuck on a more complicated question, the bot is able to transfer over the call to a live operator so the customer does not have to wait on hold for an extended period of time.