Innovate to simplify customer experience. This is what most companies want. Banks are no exception to this rule. Given the huge amounts invested in Artificial Intelligence those recent years as well as the chatbots initiatives in the financial industry, chatbots seems to be the best way to build the perfect customer journey.

What’s a chatbot and why is it the “next thing” for banks?

Chatbots are computer programs designed to have a conversation with a human being. Depending on the technology used, chatbots can answer questions, inform, make suggestions, or even proactively offer advice. All this in a natural “human” way. If the chatbots are not new, the excitement around them is mainly because people are spending more time on their phone chatting. Inevitably, companies also want to engage with their customers using this tool, and banks are no exception.

Why download an app to stay informed when you can have “someone” telling you everything you need?

When we look at the different chatbot initiatives in the financial industry, we quickly understand the stakes but also the scopes of this subject. There are many ways banks can use a chatbot. From providing basic information to allowing peer-to-peer transactions, the banking industry showed a lot of motivation and stamina in developing solutions.

With the rise of Fintech companies, banks need to develop a digital offer that is appealing and flexible to stay competitive. Redefining customer experience to make it seamless will allow banks to adapt to their customers’ behaviors and the immediacy of their needs. Also, in a context of cost reduction, automatizing functions constitute a significant opportunity for banks to offer lower prices.

Concretely, why invest in chatbots?

  1. An unexpensive, consistent and experienced 24/7 customer service

Chatbots are the future of call centers and advisors. Customers get all the information they need without having to deal with complex interfaces, being put on hold, or navigating through dark menus. Indeed, chatbots not only give answers to clients right away, but customers are sure of the accuracy of the information delivered, while banks can be sure that the quality of service is consistent whatever the time of the day.

  1. Chatbots can be the core of the brand and ensure its consistency

Brand consistency is essential to ensure client satisfaction and loyalty. Even with the scripts they get, customer service representatives always produce different level of service and have their proper way to provide information, due to multiple and understandable factors (fatigue, knowledge of the topic, etc.). This heterogeneity can create confusion for the clients and damage their experience. Chatbots make sure that the same question will be answered the same way (same tone, same vocabulary, etc.)

  1. A great tool to prevent fraud

Chatbots can be configured to send messages every time there is a suspicious activity. Users can even set spending limits or personalized alerts. This way, clients can feel more secure about their card, their transactions and even manage their budget better. Chatbots can also be used by to report fraudulent activities or block the cards when clients lose it or are robbed.

  1. An innovative way to stay in touch with your clients

If chatbots can answer questions, they are also able to engage the customer. Today, banks offer a variety of products (from credit cards to life insurances and other investment products). However, most clients don’t know about them and reduce the bank offer to the products they already have. Chatbots are here to fill the gap by pushing the relevant product to the relevant client. Wouldn’t be nice to have a cancellation flight insurance right before the summer holidays or a ski insurance in the winter?

  1. An excellent way of developing a personalized strategy and increase revenues for banks

Chatbots are an effective data-gathering tool. They give an invaluable insight on customers spending habits, future projects and even current doubts. If this makes them a greater way to remind existing customers about the products they can be interested in, it can also push banks to redefine their offer and build new products, adapted to their clients’ needs, making banks more flexible. It is better than any market survey.

  1. A cost efficient method to focus on value-added tasks

Chatbots allow banks to redefine their customer service and free not only their call centers but also client advisors and potentially all bank workers from straightforward tasks. This way, banks can opt for a more efficient resource allocation  by making their staff focus on more complex issues, and value added tasks that bots couldn’t perform.

 So are chatbots the ultimate solution to the greatest customer experience?

The answer to this one is easy: No! Chatbots can make your clients run away. A significant number of limits makes us say that banks need to use chatbots with a lot of caution.

Here are the primary limits to chatbots:

  1. Can a robot deal with real life scenarios?

Rebecca Greenfield defines chatbots as “the newest dumbest coworkers”. Indeed, Bots are simple in nature, and they have a very limited scope. Meaning that they can only answer questions that were defined before and will only make suggestions that they were set to suggest in a particular situation.

Of course, there are the “self-learning” bots, but those quickly showed  limits of self learning.

  1. Bots don’t always have the right answer

This limit is self-explanatory, bots are limited to things they were taught. If a question doesn’t have an answer, a bot will never “make” it. At best, it would suggest similar questions, at worst, it would suggest something completely off that will destroy customer experience.

Even if the misunderstanding come from the user (bad spelling, unclear question, etc.), customer experience quality is impacted. This limit shows the energy and work that is related to implementing a good chatbot and that should be considered before taking the decision of implementing one.

  1. Bots don’t always get the context…but always provide an answer

In real life, we don’t always use plain words, and our conversations are filled with “between the lines” information. Today, bots are unable to do that for more than a few questions and end up losing track of the subject of the conversation. The context is something they don’t get as there are as many contexts as people…and even more. That is why some conversation can be very awkward.

How to efficiently use a chatbot?

First, banks need to ask themselves why a chatbot? What needs would it be answering? By defining the need the bot will be responding, banks will also determine the essential characteristics of the technology they will be using. Once the objective is defined, the idea is to make sure that the user also understands the purpose of the bot to avoid frustration. Communication about the chatbot is important and should be the first step of engaging the customer.

Finally, building a bot to make interactions with the users quick and straightforward and avoid as much as possible complicated questions can be an excellent way to maximize a successful customer experience.

Chatbots are certainly a fantastic tool for a consistent and refreshing digital offer. They do have limits that can be mitigated and their benefits clearly overweight the risks. Knowing that we are currently only in the early tries and that chatbot technology is evolving every day, banks should clearly position themselves to embrace a technology that will indeed soon define the core of their way of doing business.