Thanks to ever-evolving AI, brands are able to engage with customers and leads like never before. Conversational Banking is the next big thing after mobile banking and the financial sector is adopting it en masse.
Here’s what all the fuss is about, and why it’s here to stay.
What is conversational banking?
First, let’s define conversational banking. Conversational banking is the application of conversational marketing to the financial sector.
Conversational marketing can be defined as the ability of a consumer to interact with an AI about finances through a voice or text-based conversation. This may bring to mind simple chatbots or Alexa and Siri integrations, but conversational banking goes much further than that.
See the key word in that definition is conversation. unlike a simple chatbot or a basic Alexa Integration, conversational banking doesn’t involve using specific commands to get predetermined responses but instead using machine learning and analysis to respond to conversational speech and text.
This means a consumer can ask your conversational AI something like: “What are my monthly recurring transactions?” and the AI will both understand the request and be able to respond with the requested data.
Why consumers love conversational banking
According to Accenture, 64% of consumers choose messaging first instead of calls or emails. Additionally, 80% of respondents said they would want to be engaged with brands in conversations.
It’s not a question of whether consumers love conversational banking, but why. And the answers are pretty straightforward:
- It’s faster and more convenient
- It feels less intrusive
- And it can perform tasks people can’t
First and foremost, it’s more convenient and faster! An AI can rapidly pull data that would take a human support or sales agent minutes to look up. There’s no sitting on hold, just a simple question and a quick response.
Then, there’s the aspect of sensitive issues. Customers may not feel comfortable discussing some aspects of their financials with a support agent or salesperson, but may be more than comfortable discussing them with an AI.
And lastly, AI can do things that humans can’t. Its ability to process large amounts of information makes answering queries like asking for a breakdown of spending, whether it’s financially smart to purchase a new pair of shoes, and more simple, accurate, and fast.
Why it’s so groundbreaking
When mobile and online banking hit the scene, they added convenience to banking. But, that convenience was at the cost of a personal banking experience.
Conversational banking blends the best of both online/mobile banking and face to face banking. It creates an experience that’s both convenient and personal making it easy for consumers to fall in love with not just your AI, but your brand.
When you adopt conversational banking, your brand will experience a few key benefits. First, you’ll find that your existing customers love it. Support tickets may decrease as your AI resolves issues in a more efficient manner than ever before. This, in turn, will have 2 key effects:
- Lower support costs
- Happier customers
Then, those happier customers will then go on to tell their friends and family about the experience. They’ll turn into promoters for your brand, and their recommendations will bring new leads towards your business.
And, unlike other banks and financial services that greet new leads with tedious, impersonal forms, your new leads will be greeted by none other than your AI.
That AI will go on to help increase your conversion rate as it provides a purchasing experience that’s personal and convenient. Additionally, it’ll have an easier time cross-selling and up-selling your leads and customers as it’ll have access to the data needed to make recommendations that address their personal pain points.
In other words, conversational banking doesn’t just make for a good customer experience, it makes for a better bottom line.
Conversational banking isn’t just a trend
One reservation many have about conversational banking is that it could just be a trend. After all, chatbots were made out to be the next big thing in 2016 but were more of a trend than the huge paradigm shift that many predicted them to be.
However, there are a few key differences between chatbots and conversational banking that show it isn’t just a trend.
For one, conversational banking has the data and experience from existing chatbots. Many developers have already created chatbots and were able to learn from their mistakes and their wins, combining them with the power of machine learning to create a conversational AI that is miles ahead of what chatbots offered.
Additionally, natural language processing (NLP) has come a long way since 2016, making it easier and more natural for consumers to use messaging and voice to communicate with your AI. Chatbots required specific commands, often a point of frustration for users.
Lastly, conversational banking isn’t a replacement for existing marketing, sales, and support systems. It’s a complement.
This is perhaps the biggest difference between conversational banking and the biggest reason it’ll be here to stay. Chatbots were billed as a replacement for apps and websites. It was thought that we’d all be using chatbots and live in a no UI world, but the reality is that apps aren’t going to be replaced anytime soon.
Even websites, which many view as outdated in the context of apps still account for 13% of mobile traffic. Conversational AI’s strongest benefit is that it can exist within your app, your website, and any other channel. You can integrate it with your Facebook page, mobile app, and website and it’ll provide a unified experience for consumers.
Someone could move between each platform and still get the same experience, an AI that knows what they previously have discussed and how to help them best based on the countless conversations it’s had with similar consumers.
Conversational banking is already here
One of the common misconceptions about conversational banking is that we don’t yet have AI powerful enough to make it a reality. But, thanks to recent advancements in machine learning, AI can have meaningful and transactional conversations.
You can’t make small talk with an AI yet, but handling day to day banking tasks and even providing financial advice is well within the realm of AI’s current capabilities. At this point, conversational banking is still new enough to provide a HUGE competitive advantage to those who are early adopters of the tech.
But, if you want to gain that competitive advantage, you’ll have to move fast. Not only do advancements like conversational banking tend to come around faster than expected, they tend to be adopted faster too!
Just think it took 32 years to progress from the ATM to online banking, and only 5 to progress from mobile banking to conversational banking. If we use the decrease in time between innovations as an indicator, adoption of conversational banking could happen some 84% faster than the adoption rates for previous technologies.
If you don’t want to be one of the last in the financial sector to adopt conversational banking, you need to not just implement a conversational marketing platform (like Layer), but implement entirely new marketing, support, and sales strategies.
You can learn more about the strategies and techniques used with conversational banking with the additional resources located here.