Dorota Jasińska
Andrzej Puczyk
Banking Success with GenAI
In recent years, implementing AI in many industries has facilitated user experience on many levels. One of the cases of AI visibly helping customers is chatbots. Now, customers can get help 24/7 thanks to the advanced algorithms trained to find a solution to their problems.
Evolution of AI in banking sector
AI has greatly influenced the banking industry on many levels. This includes the modernization of data practices by moving to the cloud and integrating AI into the foundations of banking services.
AI was first introduced into banking in 1980 with expert systems. They focused on market predictions and customized advice. The systems minimized human errors in decision-making by acting as experts.
Nowadays, the role of AI has expanded to personalized customer service, fraud detection, risk management, and more. AI combines massive data analysis, machine learning, and NLP to provide real-time banking services.
AI allows for a deeper analysis and better understanding of customer behavior while automating the banking process. Bank of America introduced a 24/7 assistant to help their customers in 2016. Erica is a chatbot that has evolved since its implementation.
Oliver Wyman provided a comprehensive analysis of the AI Revolution in Banking, along with examples of AI uses of digital banks:
We’re witnessing a digital transformation in banking that drives the services to offer personalized products and services. Oliver Wyman’s study of major banks from all over the world that implemented AI in the form of a chatbot, digital adviser, or virtual assistance showed enhancements in cross-sales, customer service, risk management, and more.
What are banking chatbots?
Banking chatbots are digital assistants created to engage with customers through different channels, like websites or mobile apps. They may have various functions and utilize machine learning to understand customer requests and be able to assist them.
Some chatbots offer basic services such as answering FAQs, but nowadays, they’re becoming more advanced. Thanks to AI, they can be used as personal assistants. They’re mostly conversational assistants available 24/7 and in real-time. Chatbots can replace support staff outside working hours and serve as a help resource in urgent situations.
Potential use cases for chatbots in the banking industry
Chatbots offer a range of services. particularly in the banking industry where they provide assistance in different scenarios. These bots have been designed not only to help customers but also to streamline bank employees’ work. They can support the users across multiple areas.
Personal banking assistants
Chatbots can be used as personal assistants. This means they can answer questions about banking services, loans, etc. They may help identify a transaction, close an account, or block a card. They can also take care of regular money transfers or pay the bills. Some assistants can also analyze one’s spending behavior.
The user can request chatbots to set up transaction reminders at a selected time. They can also guide users through this process.
Customer advisors
Banking chatbots often function as customer advisors. They can quickly answer FAQs about specific banking products or services instead of a human agent. Chatbots can also help in troubleshooting. For instance, if a customer needs help with password reset, the banking chatbot can guide them through the process.
Moreover, these chatbots are available 24/7, and clients can rely on them for assistance with urgent matters at any time.
Manage transactions
Chatbots can help customers initiate payments and transactions or set up regular bill or subscription payments. Banking chatbots can also be asked to notify users when a subscription is ending. Additionally, they can also check the transaction history and provide real-time status updates. What’s more, they can easily locate specific transactions or identify mistakes. If a transaction seems suspicious, chatbots can help flag and report it if necessary.
Upsell and cross-sell
Chatbots are also a valuable tool for the sales department. They can analyze customer transaction history to suggest specific services. They can also make personalized recommendations on selected products or solutions. When a customer decides to purchase a product, a chatbot can offer an upgraded service to better accommodate user needs.
Assistance for banking personnel
As chatbots can take over simple customer requests and help find solutions to common problems, people don’t need to focus on such repetitive tasks. This leads to lower employee turnover, as agents can focus on more important tasks. Moreover, chatbots can gather information on user pain points that can then be used by employees to improve the services.
Benefits of AI chatbots in banking
As AI is being used more and more in different industries, banking has used its benefits for customer service. There are many ways chatbots can positively influence users’ experiences and employees’ work.
Fraud detection and prevention
AI’s algorithms can be used to detect and prevent fraud attempts. Thanks to their analytics capabilities, they can monitor customer behavior and make an analysis of spending habits. AI can identifiy any unusual behavior or patterns in transactions.
Credit score assessment
Credit score assessment is usually very complex and takes a lot of time. Thanks to AI, which has access to all financial information within the account, it may be faster to get some insights into one’s credit limits or how to improve them. This way, people will know their financial capabilities and what amount they can apply for.
Personalized investment options
Similarly to credit score assessment, AI’s capabilities allow it to analyze one’s financial situation and recommend some investment options based on user profiles. AI can help find the right investment solutions for one’s financial needs and situation and give advice on how to proceed with the funds.
Product recommendation
Thanks to the fact that AI knows customer activity and spending habits, chatbots can recommend specific products based on the customer profile. Smart recommendations include offering an insurance package after purchasing a trip or other products, depending on the transaction history.
Financial advice
As in the case of product recommendations, AI can analyze customer financial profiles and offer tips on how to save money. This includes saving and budgeting recommendations. For example, the chatbot can recommend opening a savings account, suggest adjustments to save more, or even help in debt repayment.
Chatbots in banking sector
Why are banks using chatbots? Many financial institutions have implemented some type of AI customer assistant to offer a 24/7 service to their customers. Such notes can answer queries about transactions, account details, and many other frequently asked questions without the need to involve humans.
Their responses are fast, accurate, and lift the burden of performing repetitive tasks from employees. Moreover, they fill in the availability gap for out-of-office hours.
With time, the performance of chatbots can be improved as they learn from interactions. Thanks to the enhanced efficiency of customer service, banks can shift the attention of their employees to more complex customer needs that chatbots can’t handle.
What’s the difference between chatbots and virtual assistants? Chatbots include knowledge they use to provide answers. They can be used as guides and helpers to answer a user query. However, their scope is defined and, at the same time, limited by specific algorithms. Virtual assistants can integrate with other systems and services, which allows them to provide a wide range of help.
Still, banks often combine both to provide users with a wide range of services, and the names chatbot and assistant are used interchangeably.
Chatbots can be used, for example, to guide a user through a process such as disputing a transaction. Virtual assistants, on the other hand, can handle bill payments or money transfers on request.
Ceba/Commonwealth Bank
Ceba is an AI-based chatbot capable of helping customers with hundreds of tasks. It can assist in activating a card, checking account balances, money transactions, and more. Ceba is available 24/7 to all customers and offers instant responses to everyday banking tasks and issues. The bot can show the customer how to open a new account, identify a transaction, or aid in locking a card.
Citi Bot SG from Citi
Citi Bot SG is a chatbot service that can help customers with basic account information through Facebook Messenger. The bot operates 24/7 and offers real-time responses to queries about account balance, transaction history, card payment information, etc. It learns through user feedback to minimize the need to contact human agents. As the bot operates through the Messenger app, OTP is required to ensure data privacy.
Clari from TD Bank
TD Clari is a chatbot available within the TD app that is capable of giving instant responses to many typical questions about the bank account. The bot is available 24/7 for all customers. It can not only answer questions but also assist with tasks such as money transfers, paying bills, and finding the bank’s location nearby. Clari can also analyze spending habits by dividing transactions into categories.
Eno from Capital One
Eno is an assistant for Capital One customers. The assistant helps protect accounts and credit cards by monitoring transactions and sending notifications. It can also help customers track their spending by checking recurring charges. The chatbot is available 24/7 and can be used to check account balances or answer questions about the account. Eno is available through a mobile app and can send notifications, text messages, emails, etc. The bot can also create virtual card numbers when shopping on a desktop computer.
Erica from Bank of America
Erica is a virtual financial assistant for Bank of America. The assistant includes a live chat with a specialist and offers personalized insights on finances. Erican can help replace lost or stolen cards, check account balances, or get account information. It’s available 24/7 and can suggest investing and saving strategies or refer to a specialist.
Erica notifies customers about duplicate charges, sends bill reminders, and monitors recurring charges. It can also be used to review updates on spending and view account past transactions across accounts.
Eva from HDFC
Eva is a 24/7 personal assistant for HDFC customers. The chatbot allows users to open a savings account, check its benefits, find the bank’s branches, and more. Eva can understand voice commands. The bot can also help find the right personal and business loan offer or assist in getting a loan on one’s credit card. Eva can also assist in the card activation process and find the credit card suitable for the customer’s lifestyle. It can also check the customer’s eligibility for different types of loans, like car and home loans.
Haro from Hang Seng Bank
H A R O is a virtual assistant chatbot with AI abilities. The chatbot is available on the bank’s website, in the Hang Seng Mobile App, or on WhatsApp and can handle banking services and conversations 24/7. Haro can assist in money transfers and bill payments, foreign exchange, and credit card settlement. It also offers help in general banking services, like account balance diagrams and reminders about changes in the balance. It can also answer questions about banking, investment, insurance, and loans.
NOMI from the Royal Bank of Canada
NOMI is an intelligent assistant available in the RBC Mobile app and RBC Online Banking. The bot offers a few services, such as NOMI Insights, NOMI Find & SAVE, NOMI Budgets, etc. It can, for instance, analyze monthly cash flow and categorize transactions. The assistant can also help in finding ways to save money using predictive technology. It’s also capable of calculating budget recommendations based on the customer’s spending habits. NOMI also sends notifications about transactions, updates, and reminders about financial operations.
Milla from Millenium Bank
Milla is an automatic mobile app assistant for Millenium Bank’s customers. The assistant can help make a bank transfer or top up a phone or prepaid card by preparing a form that only needs confirmation. It can also assist in finding a transaction in history. Customers can also ask about the estimated time of transfer finalization. It operates in writing and speaking. The app is available only in Polish.
The future of AI assistance in banking
The use of chatbots is one of the ways of implementing AI in financial services. In the beginning, the chatbot capabilities focused on algorithmic responses to queries. Now, they’ve evolved to include smart and personalized assistance in various topics. It seems the advancement of technology will keep the shift from repetitive customer service-related tasks to bots.
With broader capabilities, AI assistants could help in more complex tasks in the future and offer custom financial solutions for users. Many financial institutions have already noticed the potential of chatbots, and their implementation seems to be spreading widely.
FAQ
Which banking chatbots are best for small to medium-sized banks?
When a bank is small or medium-sized, it’s best to choose a cost effective managed chatbot with a pay-as-you-go payment structure. Such chatbots are easy to set up and have ongoing support. Usually, these chatbots are pre-built and can be configured to answer simple questions. Users can use the chatbots to find answers to frequently asked questions without the need to implement complex AI features by the bank.
What are the future trends in banking chatbots according to industry experts?
Chatbots have a lot of potential in banking. Experts predict they can become advanced financial assistants that can offer personalized experience for users. For example, by leveraging AI, they would be able to analyze user intent and offer personalized offers. Generative AI can be used for complex tasks like generating financial reports. Thanks to the newest technologies, banking chatbots will most likely be implemented in core banking systems to enable seamless use of banking services.
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