Online and mobile platforms have rapidly expanded over the past decade, resulting in the rise of numerous digital-only challenger banks. Digital first banks like Monzo and Starling, as well as payment platforms like PayPal, Stripe, and Google Pay, are posing significant and unique challenges to traditional banks.
In 2022, the fintech industry globally received $28.8 billion in funding. Monzo gained a 4% market share of UK bank accounts in 2020 after being founded in 2015. Other digital native banks, such as Starling and Tide, held a combined market share of 14%. From the rapid growth of such services, it has become clear that many traditional banks have struggled to keep up with the growing expectations of a new generation of tech-savvy customers.
However, thanks to recent advances in the fields of machine learning, natural language processing, and automatic speech recognition, there is a new breed of banking technology that can help traditional banks and financial institutions regain their competitive edge. In this blog post, we aim to explain how conversational AI can unify your digital experience and significantly boost the loyalty of your customers.
The rise of the digital challenger
Traditional banks have struggled to implement seamless online banking experiences, and like circling sharks digital challenger banks have been quick to exploit this weakness. For too long, online and mobile banking has been a cumbersome experience. Simply logging in requires memorable data, a password, and proprietary two-factor authentication. When banking portals lack any consistent design principles, the result is a discordant and frustrating digital experience.
By providing a cohesive and well-designed mobile banking experience, digital challengers have made significant inroads against their traditional competitors. Likewise, these banks have taken advantage of the mobile platform to streamline the process of opening a new account. A generation of customers, deterred by complex application forms and long branch queues, have found their needs better served by these digital native challengers.
The convenience of fintech
At the same time, a variety of companies are making online payments and peer2peer transfers faster and more convenient. The pandemic has led to a permanent increase in workloads for many of us. We no longer have time to wait in line at the bank, sit on hold over the phone, or solve the riddle constituting many online banking login pages. When we need to instantly send a payment to a friend, make an international bank transfer, or shop online, many people tend to use third-party fintech services.
In contrast, the legacy methods of performing such transactions — commonly offered by traditional banks — remain complex, and various points of friction lead to a high rate of customer dropout. When it becomes difficult to effortlessly perform everyday banking tasks, conditions are ripe for the growth of challengers and competitors.
Companies like PayPal, Venmo, and CashApp have become household names, and they are no longer niche products catering to early adopters. Likewise, contactless mobile payments powered by Google Pay and Apple Pay have surged in popularity, particularly in cities where consumers use their phones to tap in and out of public transport.
However, it is not too late for traditional banks to regain ground and reclaim their competitive impetus. And, crucially, this does not require banks to tear up their legacy digital infrastructure and services. When implemented correctly, conversational AI assistants can unify a bank’s digital experience, appeal to a new generation of customers, and boost the loyalty of existing ones.
The power of conversational AI for banking
Conversational AI has advanced significantly since the days of chatbots. Sophisticated virtual assistants are capable of holding extended back-and-forth conversations with customers. Complex requests can be recognised and resolved using powerful natural language processing tech.
A wide range of everyday banking tasks can be automated through an engaging and intuitive conversational service. With such unprecedented speed and convenience, conversational AI can be an exceptional tool that enables traditional banks to compete with the services offered by fintech companies. And conversational tech excels at delivering personalised interactions to customers. This is essential to meeting the challenges posed by digital-only banks. Here are just some of the features that conversational AI can offer:
Multi-channel
You can speak with a conversational AI assistant using either text or your voice. And you can engage with the service over a variety of digital channels including SMS, instant messaging, social media, in app, on a website, or over the phone. In the banking sector, being able to offer conversational assistants via telephone is especially important. Long hold times can be a reason to put off non urgent banking transactions. With the ability to respond to customers instantly and at scale, conversational AI can make waiting on hold a thing of the past.
Cohesive digital experience
By being available over a wide range of channels, conversational assistants help to unify your digital experience. In effect, conversational AI has the potential to become the new face of banking and the first port of call for your customers. When your digital experience is consistent across a range of services, this leaves your customers with a positive impression of your brand. A unified digital experience is one that is intuitive and seamless, and conversational technology can be a powerful tool for tying together your legacy systems.
Available 24/7
Digital challenger banks have thrived by offering customers quick access to their accounts. Conversational AI helps you level the playing field. Even when your call centres and branches are closed, virtual assistants can be on hand to assist customers and provide instant answers to their queries.
The internet has made customers accustomed to getting instant answers, and conversational AI helps you keep up with these growing expectations. You can provide customers with the service they need whenever they need it.
Intuitive and accessible
Fintech firms thrive by making everyday financial transactions easier. Conversational tech can help you match the speed and efficiency of these services. Customers are not required to fill out complicated forms but can achieve their goals using their voice and natural way of speaking. With the ability to handle hesitation and interruptions, customers do not need to speak like a robot to engage with the AI.
Conversational AI can guide customers through the complex processes of transferring money, applying for loans, opening and closing accounts, and replacing lost credit or debit cards. By supporting rich queries over voice you substantially improve the accessibility of your digital platform. When users are met with a responsive service that understands them and meets their expectations, customer loyalty and retention is substantially improved.
Personalised interactions
In a world where more branches than ever before close every year, it becomes increasingly difficult to provide customers with personalised experiences. Conversational AI is now ready to meet this challenge too. With conversational technology, your bank always has complete control over the tone of the conversation. This means that the vision and values of your brand are always expertly communicated to customers.
Virtual assistants integrate closely with your entire digital ecosystem. This allows them to establish a comprehensive understanding of an individual’s financial situation. In other words, conversational AI can serve as a personal financial advisor for your customers. Not only does this provide users with personalised insights and recommendations, but it can also help banks design new products and services that are tailored to the exact needs of their customer base. Additionally, conversational AI can help to drive sales by alerting customers to products they are eligible for but are unaware of.
Powering the future of banking
Conversational AI technology is within reach and capable of delivering exceptional customer experiences. At action.ai we are committed to building the technology that will power the future of banking. We believe that virtual assistants should be accessible and easy to use while still enabling the completion of complex tasks. Your customers are unique, and their unique forms of expression should be understood every time.
With unparalleled levels of understanding, our speech recognition technology leads the industry. When you work with us, you can be sure that the technology we supply is adapted to both fit the specific needs of your bank and provide you with a significant competitive edge.
