Today, over 80% of bankers feel the key competitive advantage between successful and average banks will be the ability to deploy conversational AI in banking.
The market for AI solutions is vast and growing. It was valued at almost $10 billion last year. The projections are generous, looking up to a rise of at least five times within the next 10 years. Some industries like e-commerce, retail, manufacturing, and real estate are at the forefront in adopting conversational AI tools.
On the other hand, the process of deploying conversational AI in banking is often complicated and quite costly. Probably this is the reason why the sector is still a bit behind. Yet, institutions are finally coming to realize the vast amount of applications and benefits, such as advanced data analysis, more accessibility, better customer experience, faster document processing, better up-selling and cross-selling opportunities, lower operational costs, security and fraud prevention.
In the next part, we look at 6 conversational AI for banking applications, as well as how some of the pioneers in banking are implementing them.
1. Individualized Financial Advice and Assistance with AI for Banking
Conversational AI for banking can provide custom tailored financial advice and assistance to clients in the blink of an eye. It can swiftly analyze spending habits, income, and financial aims. Moreover it could manage routine customer inquiries efficiently, such as resetting passwords, unlocking accounts, and updating personal information.
Conversational AI in banking is actually able to analyze customer queries and to detect human intent with great accuracy. The technology serves as a router, directing requests to the appropriate departments and giving back answers directly.
These virtual assistants can not only handle routine customer inquiries efficiently, such as resetting passwords, unlocking accounts, answering queries about account balances, recent transactions, and spending patterns. They can as well act as your personal financial advisor. They can offer tailored investment strategies, budgeting tips, saving plans and more.
Bank of America’s Erica and Capital One’s Eno are on the frontiers, analyzing your spending habits and financial goals to provide personalized advice 24/7.
2. Loan Applications and Processing
Conversational AI for banking makes the loan application process a breeze. It guides customers through each step, from checking for eligibility to document processing. AI for banking can put on autopilot the whole verification and approval processes, thus significantly enhancing customer satisfaction.
JPMorgan Chase and HSBC, for example, have already successfully integrated AI to automate critical parts of their loan approval process. The AI tool analyzes vast amounts of data and assess risk right away. This level of automation has significantly decreased turnaround times without compromising security standards. This not only enhances operational efficiency but also minimizes errors and boosts customer satisfaction.
3. Uninterrupted Transactional Assistance
Conversational AI in banking is elevating the transactional experience to a point it feels like texting. Whether it is transferring funds, paying bills, or setting up recurring payments, all is done with natural language commands. This approach provides uninterrupted assistance and a simplified process. AI is making everyday banking tasks more user-friendly, efficient, and it also sets a new standard for convenience in the banking industry.
Some pioneers in the field, like HSBC and Paypal, go a step further with their voice-activated banking assistance. You can transfer funds, pay bills, or check account balances by simply speaking to your device. AI understands and processes requests, ensuring that transactions are completed without interruption or confusion.
This level of convenience transforms the traditional online banking, making it effortless and accessible anytime, anywhere.
4. Easy Document Collection and Onboarding
Document collection and sharing in banking can often feel like a burdensome task to do. With conversational AI customers can now effortlessly upload documents through a chat interface. Documents are uploaded, checked, and verified for authenticity and completeness in real-time. This makes essential processes, such as account opening, loan applications, and compliance checks, to be easily streamlined and simplified.
This is exactly what Citi Bank and Deutsche Bank already do. Their clients upload necessary documents directly through a chat interface. The AI immediately checks for completeness and accuracy, ensuring that nothing is missing. The AI system then verifies and processes these documents almost instantaneously. The technology speeds up the processes and minimizes the errors, creating a win-win situation for both the banks and their customers.
5. Strong Compliance and Governance
Conversational AI in banking changes the game in compliance as well. Traditionally the compliance processes are mostly performed through manual reviews and checks. AI-driven compliance technology platforms, however, can continuously monitor and analyze an enormous amount of transactional data and customer interactions flagging any discrepancies in real-time. For example, AI systems can automatically spot unusual transaction patterns and flag those as money laundering or fraud.
AI is also doing a comprehensive auditing and reporting, ensuring that all transactions and communications meet regulatory standards for AML and KYC. The entire process is effortless and precise. This technology reduces administrative load and also boosts transparency and integrity of the institutions.
AI solutions in banking are also used to analyze all communications with customers, by watching language and content. This is helpful to make sure that they comply with regulatory requirements as well. Plus, logging every interaction with customers, including chat, voice and email, makes it easy to have a transparent record to comply with GDPR. These detailed logs could be used internally as well when addressing disputes and various inquiries.
Citi Bank and HSBC have already launched their AI-driven compliance technology platforms and set a great example of what is possible ahead.
6. Competitive Benchmarking with Banking AI
Conversational AI in banking has one more hidden gem – competitive benchmarking. It allows banks to collect, analyze and discover patterns in vast amounts of data related to offerings from competitors, market trends and consumer preferences. The ability to work with such a large amount of data points allows banks to easily and promptly identify shifts in consumer behavior, the emergence of new financial products and technological advancements. This intelligence allows early adopters to stay ahead of the trends.
One great example is Bank of America and their use of AI to track and analyze competitor’s marketing strategies. For example, if some of their competitors launches a new feature and it receives positive social feedback, the AI system of Bank of America will mark this feature as important and prioritize its deployment. The analysis of competitors’ advertising strategies and customer engagement, helps banks refine their own marketing efforts to achieve better results.
This is also called sentiment analysis and it helps banks tremendously to understand their clients and to provide adequate solutions. For example, it could analyze customer reviews, feedback on social media, specialized forums, etc. HSBC is a good example, the bank uses AI to perform sentiment analysis on social media and various review platforms. This allows HSBC to discover areas where it can differentiate itself from competitors.
AI helps banks compare their KPIs with competitors and discover areas needing attention and improvement and ensure they stay competitive.
These proactive approaches to conversational AI help financial institutions keep up and maintain their leading position in the market.
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These conversational AI for banking tools make your experience as easy as texting a friend, offering a seamless and intuitive experience that’s setting new standards in customer convenience. They’re transforming how we interact with our finances, making expert advice and real-time assistance available whenever you need it.
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