Challenges and Benefits of ChatBots in Banking & Finance

Shiva Gaur
Published on Dec 18, 2018 in App Development
Challenges and Benefits of ChatBots in Banking & Finance

Whether we talk about the banking sector or the financial, both are facing a lot of difficulties in enhancing customer engagement, driving greater marketing ROI, building customer loyalty, and improving employees’ efficiency. Due to these issues, both these sectors are in pressure and in search of an effective support system that can not only leverage their efficiency but can help them eliminate all the difficulties they are going through.

But is it possible to 10x enhance the efficiency of these sectors?

Yes, it is possible with the help of chatbots! If you’re thinking about Facebook Messenger Chatbots, then you’re somewhere close!

Chatbots are computer programs that simulate human conversations using Artificial Intelligence. Chatbots add more functionality to your system with its Machine Learning capabilities and API integrations.

Did you know around 1.4 billion businesses are using messaging chatbots to deliver the seamless customer experience?

In fact, around 63 percent of people prefer talking to chatbots rather than brand or business. The reason behind that is their outstanding capability to give quick emergency answers, interact, and deliver information.

Chatbot development and its implementation are being done almost in every industry. Chatbots have the ability to automate operations that aid these sectors to reach out to their customers and provide them with better frictionless services.

To deliver the similar experience in banking and finance, firstly, you should know about the challenges and benefits of using chatbots. Let discuss in detail the challenges and benefits:

Challenges of Implementing Chatbots

Challenges and Benefits of ChatBots in Banking & Finance

1. Consumer Expectations

Consumers expect consistent, flawless, and customized customer service from banks and the financial sector when it especially comes to money-related concerns. However, it is difficult to fulfill customers high expectations without the use of technology and relying only on manual assistance. The banks have to be extra vigilant and make use of technology so that the discrepancies can be eliminated while handling customers issues.

2. Competition with Fintech Companies

One of the biggest challenges that traditional banking and financial sectors face is that the high competition with Fintech companies. To enhance the efficiency of their employees and smoothen the entire process, these Fintech companies make use of software applications like a Chatbot making it difficult for traditional banks to come up with technical, cultural, and operational refurbishment.

3. Strict Rules and Regulations

The rules and regulations of financial institutes and banking sector are getting harsher and strict day-by-day. This is one of the reasons, banks have to spend a hefty amount of money on developing the processes that successfully caters to the compliance. Which is why these sectors are unable to focus on implementing technology that could help improve their business.

4. Low ROI

Traditional banks and financial institutes usually spend more on their expenses such as operational tasks and compliance maintenance, which is the major reason for low Return on Investment. Technology, on the other hand, needs a strategy, a planned budget, enlisted requirements of operational tasks so that it can be implemented successfully.

Benefits of using Chatbots

Challenges and Benefits of ChatBots in Banking & Finance

1. Offer Seamless Assistance

It is extremely difficult to assist people who have little or no knowledge of banking products and services. It is a vast platform to make an individual understand from its basics. The complexities involved cannot be estimated. For instance, a person who is willing to invest in a mutual fund would like to know about minimum investment, tax deduction, expected returns, and maturity period. It is daunting for humans to handle such huge figures and calculations and the possibilities of errors are higher.

If we use chatbots for the same job, they are extremely quick and responsive. They can answer all the questions of such customers by asking a few questions such as what is your total savings and expenses, and how much would you like to invest.

2. Better Customer Support

Customer assistance in banking and Finance is of utmost importance. Customers need instant solutions for all their queries. Customer support is the backbone of financial institutes as their response can make or break their business and can lead to huge financial losses and fraudulent activities. Chatbots are a great way to offer instant assistance when it comes to resolving customers issues. They can offer 24/7 assistance without the need for manual involvement.

3. Recommend Products and Gather Feedback

Customers have their own requirements, preferences, spendings, savings, and investments based on which they like to purchase a product or service offered by banks and financial institutions. The brief information provided by customers regarding their needs isn’t enough for humans to judge and recommend a product. However, if AI chatbots were allowed to handle such matters, it would be quite simple to please customers. Chatbots have the ability to gather data based on previous experience, chats, profile and customer behavior. They can easily recommend products that best suit the profile of an individual.

4. Prevent Fraudulent Activities

Banks have to be vigilant enough when it comes to delivering seamless services to their customers. Customers, on the other hand, have faith in banks which is why they invest their hard-earned money blindly. If in case, customers face any discrepancies, customers would raise concerns regarding poor security practices. Chatbots can effectively monitor fraudulent activities and can notify customers about the same in no time. They will not only help to reduce errors and frauds but will also take the banking and financial sector to the new phase.

The Final Word

These challenges will continue to escalate, therefore, it is important for the banking and financial sector to take help of ChatBot application development services that can help improve their customer engagement and build customer loyalty. All they need to do is research about different chatbot development companies that offer better services, understands their requirements and build an application that runs successfully and lives live up to their expectations.

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About the author
Shiva GaurSenior Technical Writer at OnGraph Technologies Private Limited

She is a Technical Analyst at OnGraph Technologies Pvt. Ltd. with rich experience of the latest technologies such as Blockchain, RPA, VR, and Cognitive technology. She believes in ‘Simplicity of Words’ and uses them as her powerful tools in the field...

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