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Augmenting Customer Service With Chatbots – Banking, Financial Services And Insurance

All of us are familiar with the increasing implementation and usage of AI in different spheres of business across various industries. From fraud detection, predictive analysis, automated assistance technologies to customer support, AI is fast becoming an integral part of businesses across the world. This is even more true for the financial sector, where AI is being used in different verticals to improve aspects such as security, efficiency and the overall customer experience.

In banking, financial services and insurance sector, customer support is an aspect wherein the usage of AI is most commonplace. Chatbots are increasingly being deployed to augment customer service, in fact in some cases they have totally replaced human agents. Although chatbots are not yet able to address complex customer queries, but in a lot of cases where the customer queries are simple or repetitive in nature, chatbots are able to perform tasks and thus have replaced customer service representatives.

In this article we will take a look at how chatbots are being utilized in the banking, financial services and insurance sector and what are the numerous future possibilities.

Why are Chatbots Important

Chatbots streamline interactions between customers and services along with offering companies the opportunity of enhancing the customer engagement process and also improving the costs associated with customer service. Chatbots can simulate a conversation with a customer in a natural language through messaging applications, websites, mobile apps or even through the telephone. They have the ability to identify the customer’s intent and to extract data and relevant entities as contained in the consumer’s request. Right from ensuring 24/7 customer support and more proactive customer interaction to monitoring of customer data, gaining insights and better lead generation, Chatbots help businesses in multiple ways. To put it simply, chatbots are increasingly becoming an absolute necessity for almost every business today.

How Chatbots Have Benefitted Banking, Financial Services and Insurance Sectors

There are multiple examples today of companies in banking, insurance and financial services using chatbots. The list of companies includes startups, mid-sized firms and also globally renowned names. Moreover, companies today are looking at chatbots as a means to stay ahead of the competition and to appeal to more prospective customers. Let’s look at some examples of how chatbots have transformed the overall financial sector.

  • In the insurance sector, chatbots are helping customers file claims, move payment dates and get auto insurance quotes.
  • Also, in the insurance industry, chatbots are helping small business owners by answering queries such as “what is a deductible” and “how does the claims process work?”
  • Chatbots are also helping ecommerce businesses in answering unique customer support enquiries through natural language processing.
  • Financial institutions are using chatbots for answering customer queries and to enable them to make payments and manage funds from multiple accounts.
  • Through chatbots, companies are automating replies to frequently asked questions. Furthermore, companies are also integrating their chatbots with other management tools for more effective customer service.
  • In the financial services and banking sectors, chatbots are being used for verifying a customer’s credentials for better security. Chatbots are also helping customers with regards to their disputed payments and their individual statuses.

Types of Chatbots Augmenting Customer Service Today

Multiple types of chatbots are being used today to augment customer service, with each chatbot working in a specific way. Right from user built programs that allow companies to build their own chatbots to vendor built chatbots which a vendor provides to a company on demand, companies today have numerable options to choose from when it comes to selecting chatbots for their business. Chatbots can basically be classified in three different categories based on their functioning. These are,

  • Chatbot Augmented Messaging – In this, companies use chatbots to assist the already available human customer representatives. The goal here is to ensure customers do not feel a sense of frustration which is normally witnessed when dealing with a pure bot. Through this, companies are aiming to increase their efficiency at handling customer queries.
  • Chatbots for Email Enquiries – Most customer email enquiries today are repetitive in nature. Having a person read every email and then respond to it can be a very time-consuming task. Thus, companies are using chatbots to speed up the process, right from reducing average handling time, streamlining customer response to improving both employee and customer satisfaction.
  • Voice Based Communications – AI is more difficult to deploy for voice-based communications. In addition to the fact that its more complex to deal with voice-based communications owing to differing accents, inaudible voice pitch, background noise etc., there’s also an increased possibility of customer dissatisfaction as more often than not, customers only call companies as a last resort, when they want to address a really complex and urgent issue. Although there are numerous hurdles currently in deploying bots for voice based communications, yet technological advancements today have ensured companies are finding out ways on how to ensure effective voice based AI communications. Going forward, we can expect more development in this sphere, with voice based chatbots becoming very common in the foreseeable future.

Chatbots: Some Facts and Figures

  • According to a recent survey, approximately 1.4 billion people across the world today use messaging apps and are more than willing to talk to chatbots.
  • In another recent survey done by Oracle, around 36% of the surveyed marketers said they are currently using chatbots to provide customer service.
  • According to a recent report by Grand View Research, the global chatbot market is expected to reach USD 1.2 billion within the next decade, with a compounded annual growth rate of more than 24%.
  • According to the same Grand View Research report, around 45% of end users today prefer chatbots as the primary mode of communication regarding their queries.
  • Businesses annually spend nearly USD 1.3 trillion to address customer requests. By some estimates, using chatbots could help reduce this cost by nearly 30%.

Recent Trends and Future Possibilities in Banking, Financial Services and Insurance Sectors

  • Conversational Bots – Due to the fact that natural language processing is still not where it needs to be, some companies have started experimenting with interface based chatbots. To elaborate a little further, conversational bots can be used by businesses for conversational marketing, helping them replace frustrating forms to be filled out by customers with conversations.
  • Possibility of Bots Replacing Apps – While the idea might sound a bit farfetched, but the fact that virtual assistants have become almost universal today, with millions of people using Google, Siri and Alexa for getting information rather than going to a specific app and finding out themselves definitely points towards a future where a majority of the apps might be replaced by bots.
  • Chatbots Providing a More Human Like Experience – With the advancement in machine learning and artificial intelligence, chatbots are becoming more and more human like and accurate. Going forward, we can expect this advancement in chatbot technology to continue unabated.
  • Bots Talking to Bots – In the coming years not only will bots provide more service through direct contact with customers, they will also do so through connecting with other bots and systems. To summarize it, “in future instead of multiple channels, customers will be offered multiple bots that work together”.
  • Automated Call Centers – With the continued advancement in natural language processing, automated call centers might soon become a reality. The bots in these call centers will have deep domain knowledge and will be able to ensure smooth flow of conversation with customers.