Chatbots are computer programs that use artificial intelligence (AI) to simulate conversations with users, providing quick and efficient assistance. In the banking industry, chatbots have the potential to revolutionize the way customers interact with their financial institutions.
Here are seven potential use cases of chatbots in banking:
Customer service
Chatbots are increasingly being used in the banking industry to provide efficient and cost-effective customer service. Customers can interact with chatbots to get answers to their banking-related queries and resolve issues related to their accounts, transactions or products. Chatbots can also be programmed to provide personalized responses to customers, enhancing the customer experience.
Chatbots can provide 24/7 customer support, allowing customers to get assistance at any time of the day or night without the need to wait for a customer service representative. This can significantly reduce wait times and improve customer satisfaction.
Furthermore, chatbots can handle multiple queries simultaneously, enabling them to handle a high volume of customer requests efficiently. This can save banks time and money, as fewer customer service representatives may be needed. For instance, the chatbot of Bank of America’s virtual assistant, Erica, can help customers with a range of tasks, such as checking their account balances, making transfers and even disputing charges.
DID YOU KNOW? Bank of America’s voice-activated virtual assistant Erica now has > million users! Financial institutions of all sizes need to make #voicebanking part of their digital strategies. Around 41% of U.S. consumers now own a voice-activated speaker. #fintech #finserv
— ENACOMM (@ENACOMM) December 17, 2019
Personal finance
Chatbots can also be used for personal finance purposes, such as budgeting, financial advice and investment guidance. They can provide personalized recommendations based on a user’s spending habits and financial goals and help users keep track of their expenses and savings. For example, a chatbot could help a user set a budget and remind them when they are approaching their spending limit in a particular category.
Furthermore, chatbots can assist users in finding the best deals on financial products, such as credit cards, loans and insurance policies. They can compare different options and provide recommendations based on the user’s needs and preferences. For instance, Cleo, a chatbot from Cleo AI, can help users track their spending habits and provide suggestions on how to save money.
Related: How to financially prepare for a recession
Loan applications
Chatbots can be used in loan applications to streamline the process and provide 24/7 support to customers. The chatbot can guide users through the application process, answer questions and provide real-time updates on the status of their application. By automating parts of the loan application process, chatbots can help reduce errors and processing times, leading to a faster turnaround time for loan approvals. Chatbots can also assist in collecting necessary documentation and verifying user information.
Additionally, they can use natural language processing (NLP) to assess the creditworthiness of a user and recommend loan options based on their financial situation. For example, HSBC’s Jade chatbot can help customers apply for personal loans and mortgages by providing assistance and collecting necessary information.
Account management
Chatbots can help customers manage their accounts by providing account balance information, setting up automatic payments and updating personal information. For example, Wells Fargo’s chatbot, named Greenhouse, can help customers manage their accounts by providing balance information, setting up payments and even tracking spending patterns.
Fraud prevention
Chatbots can also be utilized in fraud prevention in banking. Fraudulent activities can lead to significant financial losses for both customers and financial institutions. Chatbots can help prevent fraud by monitoring and analyzing customer behavior and transactions in real-time to detect suspicious activity. Chatbots can also be programmed to send alerts to customers in case of unusual activity or suspicious transactions.
Additionally, chatbots can assist customers in reporting fraudulent activity and provide guidance on the next steps to take. With the help of chatbots, banks can improve their fraud prevention strategies and mitigate financial risks. For instance, the chatbot from Mastercard, named Kai, can help identify suspicious activities and alert customers of potential fraud attempts on their accounts.
Mastercard introduces KAI #ChatBots & #millennials are liking the idea of messaging platforms… https://t.co/Q3OlZOYM95 #MastercardEmployee pic.twitter.com/ONjPzAtjno
— Darko Nikolic (@nikolichdarko) November 3, 2016
Investment assistance
Chatbots can provide investment advice and portfolio management recommendations based on customer preferences, risk appetite and investment goals. For example, the chatbot of Wealthfront can provide investment advice and portfolio management recommendations based on customers’ preferences and risk appetite.
Related: A brief history of digital banking
Marketing and sales
Chatbots can promote bank products and services and help customers open new accounts or upgrade their existing ones, providing personalized recommendations based on their needs and financial profiles. For instance, Ally Bank’s chatbot, Ally Assist, can provide personalized recommendations and help customers open new accounts or upgrade their existing ones.