History has been witness to many revolutions but perhaps none as profound as the one brought on by technology. Barely any aspect of human life has remained untouched by it. Fintechs have been making rapid inroads into markets where traditional US banks once held sway. The pandemic has certainly played spoilsport. With branches shut due to lockdown, customers have been more willing than ever to try new alternatives.
It is here that Fintechs have struck gold by simplifying the banking experience. A recent McKinsey study showed that consumers regarded Fintechs as far better in terms of convenience and user experience. The rapid growth of Fintechs has many lessons for banks. These can be condensed into just four words: adopt tech to boost growth!
Challenges Faced by Traditional Banks and How Conversational AI Can Help
A quick SWOT analysis shows banks lagging in many areas, ultimately impacting the customer experience. Let’s take a look at some of them:
1. Complicated Policies and Procedures
Fintechs have the lead when it comes to offering customized payment options like virtual debit cards, split payment, and multi-currency accounts. In comparison, banks still require customers to go through multiple steps for making everyday transactions – for example, security verification. The rapid growth of payment apps is proof that customers prefer seamless banking solutions across channels.
While regulatory requirements have a major bearing on the policies and procedures followed by banks, there is much they can do to improve personalization and service delivery. For example, traditional customer support channels are often too slow to respond, causing many customers to give up in frustration.
2. Expense and Wealth Management
Young Millennials – now the single largest consumer group across the world – have been showing renewed interest in personal finance and retirement solutions since the pandemic. Fintechs have been quick to fill this gap with digital apps that help track spending, transfer funds, and push personalized offers based on specific user needs.
Traditional banks are still catching up, largely because of legacy systems that make it harder for them to build a 360-degree customer profile.
The result: Banks are often unable to offer the personalized investment insights that customers expect.
3. Rewards and Offers Management
Studies show that consumers have a natural inclination to ignore marketing messages they deem irrelevant. This is why financial brands today focus on targeted, contextual ads that look no different visually than the content surrounding them.
While banks have been adopting omnichannel marketing strategies, there is still scope for improvement in terms of offer relevancy and frequency. On the other hand, FinTechs are way ahead at conversational marketing which is known to maximize customer engagement and conversion.
How Banks Can Up the CX with Conversational AI
All told, banks still enjoy a higher level of consumer trust than their FinTech counterparts. Banks need to leverage this advantage while making up for any gaps in the customer experience. To do this, they need to adopt, among other things, the latest conversational AI technology.
1. Simplified Onboarding and Claim Processing
From savings accounts to trade finance, conversational AI can greatly improve the onboarding experience for customers. As soon as a customer enquires about interest rates or a loan tenure, an AI chatbot can respond and help them smoothly navigate the application process. Leveraging CRM data, chatbots can cut onboarding costs while delivering a consistent customer experience.
Claim processing is another area where chatbots produce dramatic results. Chatbots can capture claim requests, provide instant status updates, and expedite claim settlements. For banks, this means greater efficiency, lower costs, and better customer engagement across journeys.
2. Personal Investment Advisor
Chatbots are ideal tools that banks can deploy across apps and websites to help consumers allocate their savings to different investment options. Chatbot advisors can also help consumers realign their investments, depending on changes in income or financial priorities.
After all, conversational AI can assess user intent and even emotions to provide tailored investment advice to customers. The best part: all this information is delivered contextually, which is the next best thing to having a personal banker explain things to customers.
When it comes to high net worth customers, the bar has already been set quite high. AI chatbots can easily satisfy a growing demand from affluent customers for personalized, jargon-free reports on new investment opportunities.
Chatbots can thus supplement and enrich the wealth management process used by banks. As you can see, the ROI from conversational AI for banks can be staggeringly high!
3. Tailored Recommendations
The eCommerce industry has had phenomenal success with personalized recommendations and offers. Based on the data like spend history, account balance, credit score, credit utilization, and income levels, chatbots can shorten the offer discovery to conversion cycle.
AI-enabled chatbots serve offers at the most relevant points during an interaction. Customers do not feel pushed to buy but are more in control. In turn, this improves CSAT and NPS as well as CLV in the long run.
Partner with Insync to Transform your Customer Experience
The time for banks to reinvent themselves with personalized, on-demand customer experience is now. Insync can help you build on the trust factor to create lifelong relationships with customers. To learn more about how to leverage conversational AI to scale and optimize customer support, book a demo with us today!