Financial Services

5 ways conversational banking boosts your bottom line

Banking services have seen significant digital transformation in recent times. Customers can now take care of almost all transactions digitally without having to visit a bank branch. However, banking customer service has not seen the same progress. This is where the banking industry fumbles.

Any organisation with a digital presence is expected to offer its customers a platform to converse online. Customers have questions every now and then but they often have to contend with a very simple chatbot, or filter through lists of FAQs that rarely answer complex questions. Most of the answers are vague at best. Getting through to a human customer service agent is even more cumbersome. Enter: Conversational Banking, the service that everyone has been waiting for.

What is conversational banking?

Conversational banking is a newer avatar of digital banking in which customers interact with banks using voice and text messages, and through mobile apps and websites. While customers get their banking needs fulfilled through the services available, banks get an additional channel to understand their customers’ requirements and expectations. Conversational automation allows organisations to seamlessly move from bot to humans and across channels. While the use of chatbots is often referred to as conversational banking, in reality they are only a part of it. This is because chatbots can rarely answer complex questions.  

How can conversational banking help the banking industry?

Conversational platforms and communications platform as a service (CPaaS) make conversational banking possible. Both of these are driven by artificial intelligence (AI) and integrated communication channels.

Investing in customer engagement solutions to make conversational banking possible leads to many positive paybacks for banks. 

  1. Ensure personalised and seamless services
  2. The intelligence dimension of customer service functions as a storehouse of information and makes personalised services possible. Banks can track and learn from customer interactions to provide customised and seamless service, while customers can use their mobile devices to get their questions answered from anywhere, get issues resolved faster and wait for shorter periods to talk with a live agent. The flexibility offered to customers is because of the omnichannel dimension which comprises applications and the various communication channels.

  3. Boost revenue and customer loyalty
  4. When customers have many conversational channels to interact with — online chats, SMS and social messaging apps — they tend to engage more often. Positive associations lead to profitable relationships between banks and customers.
    Younger customers tend to jump ship fast. However, when customer satisfaction improves, they stay with the bank and the bank has to spend less to attract new customers. Customer loyalty and trust receives a boost leading to higher conversion rates. All of this results in higher net promoter score (NPS) and more chances to convince customers to invest through the bank.

  5. Reduce operating costs
  6. Although it seems contradictory, banks can offer customers better support without increasing costs. It all boils down to using the right communication technologies.
    1. AI chatbots can answer commonly asked questions or direct customers to the right content for more answers. Live agents can be pulled into the sessions only when the questions are complex. This kind of a hybrid conversational strategy ensures that real people need not spend valuable time on every customer service request.
    2. CPaaS enables quick retrieval of earlier interaction histories, and that prevents conversations from having to begin from scratch each time. This not only reduces time spent, but it also gives customers a better experience. Starting from scratch is a common point of frustration for most customers.
    3. Banks use SMS authentication to reduce fraud. Customers can be immediately notified about all activities in their accounts thereby allowing them to act quickly in case of any suspicious activity. The high costs of managing fraud can be significantly reduced. 
    4. Mobile verification solutions help to keep customer data safe and enable customers to access their accounts seamlessly without any friction. Investing in the right technological solutions is sure to reduce the cost of handling any data breach.

  7. Encourage innovation
  8. When banks make conversations with customers easy and accessible, customers are more likely to share relevant data. More data would mean that banks would have better insights into their customers’ financial habits and goals.
    1. Customers then receive curated advice that would help strengthen trust and relationship between both parties. The data would help banks develop more innovative tools and services to meet the needs of customers.  
    2. Customers who interact through many channels are more likely to buy more bank products and help generate more revenue. Banks must innovatively use all the available and secure channels for communication.
    3. The more innovative and intuitive the conversations are, the lower the customer support costs become. Secure messaging apps have become quite popular in the banking world too. Customers can get real-time updates about their account balances and transactions, and they can even authorise transactions over messaging apps.

  9. Allow new customers to join digitally
  10. Certain banks now allow customers to open accounts without requiring a visit. For example, banking giant Barclays has adapted conversational banking technologies to attract digital customers. Their video banking service enables new and existing customers to interact face-to-face with their bank representatives from any global location and through any device that supports video calls. Distance is no longer a hurdle to access better services.

Looking at the big picture

Using communication technologies to improve customer service can never be a mistake. However, in the rush to complete digital transformation, many banks and financial organisations have mechanised areas of customer service that were earlier managed by real people. The results have not always been favourable among customers. The attempt should be to humanise digital services as far as possible.

Conversational banking provides that missing link. The benefit of conversational banking is two-fold —  higher customer satisfaction, which translates to more business and customer loyalty, and which in turn allows banks to reduce marketing costs to draw new customers. Reducing customer acquisition cost (CaC) is a constant challenge but by implementing the right communication technologies to impart the right information, customers can be convinced.

All in all, conversational banking is a win-win situation that can deliver a huge return on investment (ROI).

* For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.

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