Conversational Banking: More than a chatbot
The term conversational banking is appearing more and more frequently. This makes it all the more important to have a uniform definition here. Anyone who thought that this was just about chatbots in the financial environment was mistaken: Conversational Banking encompasses much more. The term describes the sum of all digital interaction options of a bank that take place on messaging platforms as text-, voice- or video-based dialogs. Thus, live chats also fall into this category. By the way, in conversational banking, it doesn’t matter whether we are communicating with humans or machines. Some financial service providers may now ask: But we already have e-banking, why do we need something new again? Quite simply, user-friendly e-banking is no longer something special. On the contrary, customers expect it, just like a mobile banking app for smartphones, which most banks already offer. So to remain innovative as a financial services provider and offer a maximum customer experience, you have to go one step further. It therefore pays to optimize communication channels. And that’s where Conversational Banking comes in.
Not convinced yet? Here are three reasons why every bank should start integrating Messenger channels into their existing communication channels by now:
Reason #1: Chats are the most frequently used communication medium
You could almost say that thanks to a certain app with a green and white logo, everyone can chat now. And even data protectors need Messenger, even if not this specific app. So the Messenger communication channel is continuously gaining new users, regardless of the app used. After all, while chatting was more a private matter a few years ago, this way of communicating has also found its way into companies, at the latest since the increase in home office work. Furthermore, there are more and more well-functioning voice assistants and companies are increasingly offering their customers automated contact channels via Siri, Alexa and Hey Google. In short, almost all of us use messenger channels in some form. As a result, companies are increasingly expected to adapt to our communication habits and be reachable in this way.
Reason #2: 24/7 service becomes the standard
As soon as the e-mail has been sent to the bank, customers wait impatiently for a personal response. Nowadays, it is no longer enough to send an automated message à la “We’ll get back to you within the next 24 hours”. Customers expect a quick response and that their concerns will be resolved immediately. The day of the week or time of day doesn’t matter. The only thing is that it is unrealistic to have employees on duty around the clock to deal with customer requests. With chat or voice bots, however, companies have the opportunity to answer a large number of these messages automatically in real time. This is because the 80/20 rule usually applies. This rule states that 80% of customer requests occur repeatedly and can therefore be easily automated using chat or voice bots. Only 20% of all requests cannot be answered automatically. In such cases, modern conversational banking systems automatically forward the request and add the responsible person to the conversation.
Reason #3: Messaging creates emotional bonds
Conversational banking creates an emotional bond between customers and bank advisors. Whereas many people tend to communicate in a formal and distant manner in e-mails, a conversation via messenger creates more closeness. Chatting is much more likely to create a personal exchange at eye level. This also applies to dialogues in which customers make inquiries to a company. In this way, banks can use conversational banking to build an emotional relationship with their customers despite advancing digitization, deepen the customer-advisor relationship, and at the same time increase trust in the bank as a service provider.
Conversational Banking in action? In the next article in this series, you will learn more about the individual use cases of Conversational Banking.
Sophie Hundertmark is an independent consultant for the strategic support and implementation of chatbot projects and a research assistant at the Institute for Financial Services Zug (IFZ). She is currently writing her PhD on the application of chatbots in banking and insurance.