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Conversational AI for Banking: Decoding the New Wave of Digitization in the BFSI 

Conversational AI for Banking

Technologies such as AI & ML have been actively reshaping the way regular duties were performed across industries. Small and large enterprises are now tapping the capabilities of these aforementioned technologies for immediate and groundbreaking solutions to enhance customer experience, cut costs and improve efficiency across their functioning units.

The post-pandemic market has witnessed unprecedented demand in the usage of AI-backed conversational solutions. Case in point, the global Conversational AI market is expected to touch USD 32 Bn by 2030, growing at a CAGR of 20% from 2021 to 2030. 

AI for Banking

The demand for artificial intelligence-powered solutions in the form of chatbots in the banking industry has also become the most talked-about topic in the past few years. This reliance of banking institutions on AI-backed solutions has certainly not been overlooked, as we see the technology foraying into the BFSI industry and transforming multiple facets industry-wide.

Why Conversational AI for Banking?

Conversational AI in the banking, financial services, and insurance sector is at an evolving point, where both institutions and customers are now able to streamline their exchange of operations. According to a report, the global chatbot market for BFSI was valued at USD 586 Mn in 2019 – with expectations of the number reaching up to USD 7 Bn in 2030. Furthermore, a research report also estimates that institutions can be saving up to USD 7.3 Bn by 2023 by leveraging AI chatbots. 

The technologies supporting Conversational AI were uneconomical and unreliable. However, as digital transformation takes center stage, certain factors have led to the solutions’ proliferation. The full-scale adoption of technologies like Cloud, Natural Language Processing (NLP), and Speech-to-Text have been pivotal in the hassle-free and cost-effective implementation of the solution.

In banking, now more than ever, the time is ripe for Conversational AI banking to achieve meaningful human interactions. 

Adopting Conversational AI in Banking: The Benefits

Benefits of Conversational AI in Banking

These artificial intelligence-powered chatbots come with opportunities aplenty. They are a surefire solution to help the banking service providers within the industry to meet customer expectations and manage queries effortlessly. In the following few sections, we deep dive into the technology’s benefits to help you get started:

Upleveling Customer Support Experience

The use of conversational artificial intelligence in BFSI has come a long way, courtesy of the technology’s core foundations — chatbots and virtual assistants. The aforementioned innovations have become the favorites of banking and financial institutes as the face of their applications to seamlessly communicate with their customers. 

This sharp increase in the use of voice assistants is primarily driven by famous players like Siri and Alexa. Both of these have made banking service providers understand the imperatives and opportunities of adding voice assistants to their arsenal. Having your mundane and human resources-consuming functions powered by them can significantly churn down the costs and expedite customer care calls.

Hassle-Free Way to Apply for Services

The internet-driven era has streamlined most banking and financial services. Banking service providers are now being catapulted to using AI chatbots and voice assistants in helping customers effortlessly apply for new products, loans, or services. 

The efficacy of chatbots in offering simulation-based banking services enables customers to apply or withdraw from services without having to visit a bank or speak to a representative. Conversational AI banking has drastically improved — the analysis it uses based on user interactions does help in putting forward the best products and services available to the customer needs.

Elevating the Lead Generation Game

Automation has certainly augmented the efforts of banking and financial institutions in landing more leads. As part of this automation-powered new-age banking, AI chatbots have come to the rescue of bank representatives in securing leads that could become potential customers, and give business to the bank. 

The deployment of omnichannel chatbots is perhaps the best use of conversational AI banking in generating more leads. The availability of chatbots across channels (Facebook, Instagram, WhatsApp) offers bank representatives abundant leads and conversions. Furthermore, this ensures that the users are prioritized — and made to feel important with instant assistance. 

Players Entering the Conversational AI Banking Market

HDFC’s EVA or Electronic Virtual Assistant has eased the monotonous banking activities of the bank’s million customers. Since its launch in 2021, the AI-powered chatbot has addressed innumerable customer queries — with an incredible accuracy of over 85%. Among the many banking services it caters to, the virtual assistant shares information such as branch addresses, loan and interest rates, and more. 

Erica by Bank of America. Another notable example comes from the leading US banking service provider — Bank of America. Known as ‘Erica’ to the bank’s customers, this AI-driven chatbot leverages the capabilities of predictive analytics and natural language to help in-app banking users scour through their banking details. 

Besides the basic account-related information, Erica offers a helping hand to customers in making better financial decisions by sharing personalized and proactive insights to make their banking experience better and more effective. 

The Path Ahead

The resilience shown by the players in the banking and financial services sector in these testing times has been extraordinary. This not-so-novel wave of innovation has exceeded expectations in turning the erstwhile monotonous banking experience into a much more seamless one. 

Given the current unpredictable landscape of the sector, BFSI players need to accelerate the use of Conversational AI in the best capacity. To outsmart the competition in what is touted as the Conversational AI revolution in the industry, you need to partner with artificial intelligence service providers right away.

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