Will AI Change Banking?

According to a report released by Gartner, consumers want to manage 85% of the total business interactions with banks through Fintech chatbots by 2020. These numbers show the future of banking depends on automated customer engagement, but are banks ready for their digital transformation?

It seems the banking industry is in a very early stage of adopting automation and AI for banking services, as call centers remain a large piece of their customer engagement strategy. Forrester reports the finance industry is the biggest employer of call center jobs, representing 15% of the population.

This is a paradoxical statistic as research shows that phone call-based customer service is an outdated form of engagement, and is not only costly, but customers also do not prefer it. A Zendesk survey found that two-thirds of customers prefer self-service over speaking to a company representative, and nearly half of respondents in our Millennial Mobile Consumer survey stated that they have switched companies after waiting on hold with customer service for too long. Customers would rather handle their issues themselves instantly than to speak with a representative. Companies that will delay embracing these trends will likely lose customers and struggle for existence – just like retail businesses that ignored the rise of ecommerce.

This is a paradoxical statistic as research shows that phone call-based customer service is an outdated form of engagement, and is not only costly, but customers also do not prefer it. A Zendesk survey found that two-thirds of customers prefer self-service over speaking to a company representative, and nearly half of respondents in our Millennial Mobile Consumer survey stated that they have switched companies after waiting on hold with customer service for too long. Customers would rather handle their issues themselves instantly than to speak with a representative. Companies that will delay embracing these trends will likely lose customers and struggle for existence – just like retail businesses that ignored the rise of ecommerce.

Incumbent financial institutions need to make their leap into embracing these new tech trends before losing their customers to companies who are already adopting innovation into their customer engagement strategy.

Companies that have already begun to reach the 1.2 billion mobile banking users worldwide with automated customer engagement are using these strategies for a wide variety of successful use cases. Here are some examples:

• Citizens Bank had previously noted that customers were not receiving notifications via email and phone calls, and so began using a messaging app to send reminders. Using automated reminders helped increase their loan completions by 10%.
• Bank of America is focusing on helping their customers save money with suggestions on how to pay down debt, providing updates on their FICO score, and tips on how to make smarter banking decisions tailored to their customer’s needs.
• 82% of all customer support for Digibank, Singapore’s largest bank, is now handled through a chatbot, helping the company run their customer service unit at a fifth of the cost of running a traditional bank.
• Capital One’s chatbot helps customers manage their money via text. They are able to request account balances, recent transactions, credit limits, and payment history. Customers can even pay credit card bills by text.

AI and Automation allow banks to reach their customers where they’re at, at a significant fraction of the cost. By handling simple transactions like the examples above with chatbots, banks can solve customer requests instantly, and save money at the same time. In fact, Juniper Research predicts chatbots will be responsible for cost savings of $8 billion per year as of 2022. So, even though Gartner estimates that we’ll reach 85% banking automation by 2020, the question is, why not sooner? We can help you get there a whole lot faster.

If you’d like to learn more about automating customer engagement in banking, email any of your questions to [email protected].

Sources:

1. https://www.forbes.com/sites/blakemorgan/2017/08/06/5-ways-chatbots-can-improve-customer-experience-in-banking/#1e79ab714861
2. https://www.forbes.com/sites/blakemorgan/2017/08/06/5-ways-chatbots-can-improve-customer-experience-in-banking/#1e79ab714861
3. https://www.americanbanker.com/news/chatbots-to-humans-move-aside-i-got-this
4. https://www.juniperresearch.com/press/press-releases/mobile-banking-users-to-reach-2-billion-by-2020