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Why can't chatbots replace advisors in digital banking?


For all the positives of digital banking driven by machine learning techniques, customers are telling us something is missing. 

There’s no denying that AI, machine learning, and predictive analytics have had a positive impact on the banking sector as a whole. AI-powered banks have made it easier to meet regulatory requirements, improve risk management, and generally increase the competitiveness of banks.

This impact has even extended to the customer service experience. After all, AI-first banks are better able to create targeted recommendations for customers in the banking industry. What’s more, these technologies continuously learn and update their predictions based on individual behavior and recent life events, providing ever more personalized and relevant advice.

The problem, however, is the quality of this experience. While traditional banks have opted to use technology as a means to drive efficiency, they’ve done it at the expense of building personalized connections with their customers.

The fact is, the lack of human contact in the artificial intelligence space has resulted in challenging customer experience gaps. These gaps take a number of forms. It could be inconsistent personalization when comparing the in-branch experience to the irrelevant offers received by email. Then again, it may be a case of receiving excellent service when opening a checking account but having a negative experience when they apply for a loan online.

Whatever the situation, the inevitable result is customer frustration, which reduces loyalty and leads to increased churn.

Bot-driven conversations aren’t a catch-all solution

It’s common for new technologies to capture the imagination, leading to an overestimation of their abilities. To a certain extent, this is what happened with bots – and conversational banking began relying on them too heavily and too soon.

In fact, the finance industry goes so far as to define conversational banking as a means of interacting with a non-human interface to discuss finances or even seek advice. In this context, customers interact with chatbots to exchange messages, ask questions, or give commands. Machines can identify what people say and offer relevant information, but they cannot deliver meaningful and empathetic advice and the conversation soon breaks down.

For example, buying a home and applying for a mortgage are the kind of interactions that need human support. AI-first banks that leverage conversational interfaces can bridge both of these human and digital experiences so that they provide better services to customers.

The human touch in the banking sector

There’s no doubt that the use of advanced technologies and artificial intelligence in banking does make customer service communication faster and more efficient. A PWC report found that chatbots were one of the top three most popular applications among surveyed banks for this very reason. Transactions like paying a bill or transferring money can fit into a customer’s daily life asynchronously, which means whenever they choose to fit it in, and technology offers an efficient means of doing this. 

But this efficiency comes at a cost and self-service channels are increasingly being shown to negatively impact the customer experience in other scenarios. If a customer is trying to carry out a complex financial transaction and they encounter a problem, the limitations of chatbots become quickly apparent and lead to feelings of frustration.

Furthermore, chatbots, by nature, can only offer generic advice that is limited to what they have been programmed to say. And so at those times when customers require personalized advice and reassurance – something that only humans have the capacity to give – they need an omnichannel experience and the option to transfer between human and digital channels seamlessly, whenever they want. This is why around a third of European and American customers trust chatbots to handle simple financial tasks – yet almost two thirds don’t trust them to handle complex financial tasks.

The answer to these limitations is to use chatbots as a complementary tool, rather than a replacement for service agents. While chatbots are capable of refined conversations that mimic financial services agents, they still don’t have the capacity for nuanced understanding and connection-building that humans have. And the statistics back this up as hybrid experiences scored higher on effectiveness, ease, and emotion than digital-only or physical-only experiences.

Chatbots should serve as a first port of call, allowing customers to transfer to an agent whenever they want, ensuring that no customer is left without the help they need. Having the opportunity to transfer from interacting with a bot to speaking to a human in real time is especially important in the context of complex customer service inquiries that require a level of sensitivity and understanding that chatbots currently lack.

Providing multiple channels to choose from

Omnichannel customer journey

Different customers have different needs in the banking industry and the more banks are able to offer a personalized service, the better. Younger customers, for example, will often be happy with self-service tools as they are more familiar with digital technology. Others in wealth management or investment banking might have more complex needs and require a more traditional real-time, hands-on approach. Given this diversity of customer needs, banks must offer an experience with multiple channels of communication. By considering different points of the journey, conversational banking can evolve for the customer’s needs.

AI chatbots

While unsuitable for banking conversations that require more depth, the expanding possibilities of artificial intelligence offer a good conversational touchpoint for simple interactions. Take Bank of America’s hybrid chatbot Erica for example, which talks regularly to more than 1.5 million customers daily, or Capital One, which allows customers to access their bank accounts through Alexa.

Private messaging channels

For many banking customers, a private messaging channel will provide the most convenient point of contact. In total, 81% of today’s consumers expect brands to offer customer engagement via private messaging channels, making it a firm favorite for financial matters, too. A credit union or retail banking messenger could be asynchronous or instant, since many customers will be content to leave a message for later as they would with an SMS or Whatsapp. 

Banks can opt to integrate the use of these popular end-to-end encrypted channels (WhatsApp, Facebook Messenger and WeChat) for next-level convenience, offering a sublime customer experience that delivers ease and personalization.

Voice and video calls

For customers and members who require support on a more complex issue, voice and video calls are a vital touchpoint that naturally offer a human dimension. That being said, credit unions and banks must strategize in order to turn calls into a chance to consolidate customer relationships, rather than a laborious exchange.

Navy Federal Credit Union, a repeat leader in Forrester’s Customer Experience Index, has been successful in making voice calls a positive touchpoint for conversational banking. Deep analysis of call center issues has enabled the credit union to optimize conversations that come up regularly, so that agents are now able to give instant resolutions for common queries. Striking a balance between digital convenience and human-based conversation, this is an example of a solution that leverages conversational banking to its fullest potential.

Artificial intelligence technologies and machine learning can transform financial institutions’ customer service, reducing resolution time, and cost savings on support. However, unless these tools are integrated with those that allow for human-to-human conversation, they risk leaving customers alienated and frustrated. Instead, financial industry providers should merge self-service tools like chatbots with other conversational and collaborative solutions like live chat and co-browsing, offering an omnichannel experience that adapts to customer needs from moment to moment.

Chatbots & Unblu

Unblu empowers AI-first banks and financial institutions to build an omnichannel customer journey, creating a hybrid experience that combines the best of human and high-tech in digital banking services.

Discover how digital tools can help financial services companies to multiply the opportunities for meaningful conversations with customers. Simply book a demo and an Unblu team member will be in touch.