Chatbots for Retail Banking: Enhancing Customer Experience and Efficiency

The challenge for modern retail banks is to evolve with the demands of a new generation of clients and provide excellent customer care standards at every touchpoint.

It has been a few years since the digital banking tech rush following the pandemic, and there has been a shift towards conversational banking where interactivity is so crucial. 

Chatbots for retail banking empower customers to take initiative and institutions to be proactive in their approach to assisting them.

Failure to offer instant, convenient, and satisfactory support with tech-forward thinking leaves established banks at risk of losing a significant share of the market to a growing number of fintech companies and other smaller entities. 

First-class customer service is no longer a luxury. It is the difference between growth and stagnation.

Especially for retail banks. 

Drive conversational banking that creates lasting customer relationships

‘Conversational banking’ is a concept that has gained much traction, and chatbots are already lighting the way towards transparent and efficient interactions that nurture client relationships.

With digital banking solutions more in demand than ever before, there has never been a better time for the sector to begin implementing chatbots for retail banking.

Fittingly, that is borne out in the numbers. 

The statistics behind chatbots for retail banking

  • As far back as 2020, 13% of banking and lending institutions used chatbots.
  • 79% of all successful experiences will be had on chatbot-powered banking apps, too.
  • As much as 80% of banks know chatbots could be massively beneficial.
  • In 2017, bots were saving banks 4 minutes per inquiry. Imagine what they do now.
  • 43% of customers prefer to take their queries to a chatbot instead of a person.
  • In 2019, the chatbots in the BFSI market were valued at $586 million.
  • In 2030, that number is expected to reach $6.83 billion.

What is a banking chatbot?

Using a series of predetermined conversational ‘flows,’ Natural Language Processing (NLP), and, in some cases, Machine Learning (ML), chatbots are tasked with fielding queries in place of a human agent.

Their ability to automate time-consuming tasks means they are the perfect supplementary solution for any customer service department.

You don’t need a catalog of research to know that people don’t like waiting.

And with chatbots for banking, you can answer more queries faster and more efficiently, as well as free agents to take on more pressing concerns.

AI has played a major role in the rise of chatbots as an essential tool in the financial sector. Chatbots for retail banking provide an easily scalable means of offering the highest quality customer service, allowing for more convenience, personalized support, and immediacy. 

Chatbots for retail banking create conversational commerce that prioritizes customers and gives them every access to the services and answers they need.

So why are Chatbots for retail banking so important?

With a rising demand for more fulfilling customer experiences and modern consumers’ willingness to adopt tech-forward solutions, chatbots have made themselves indispensable to financial institutions.

Being able to cater to these demands adequately is vital for customer growth and retention.

What are the main factors contributing to their growing importance? Two reasons.

The bar has been set high for customer care in banking

The expectations placed on banks to continually develop and upgrade their customer service are not merely a comparison to the services offered by other banks.

They are part of a growing global demand for better service across all industries.

This trend is known as ‘liquid expectations’ and refers to the fact that seamless customer experiences are now a given across all industries.

And that is a significant driver in implementing chatbots for retail banking.

Chatbot adoption is at an all-time high

In the past, chatbots have been something of an afterthought—more a gesture than an actual solution. 

That sentiment has changed dramatically.

In their previous iterations, chatbots have been clunky, unreliable, and, more damningly, not of much help. But with chatbot technology now backed by AI and ML, bots have made themselves irreplaceable to the banking sector and almost every other one.

The fact is that consumers have been won over by chatbots’ ability to give them what they want, when they want it, how they want it. 

Chatbots for retail banking solve all of these. 

And with MIT believing that chatbots can instantly address 90% of all issues, it is easy to see why satisfaction rates have skyrocketed and why the popularity of chatbots for retail banking has soared.

What are the benefits of chatbots in banking?

As the face of efficiency in modern commercial activities, chatbots boast a host of features that deal directly with what is expected from banking institutions. 

Not only do they offer a smoother user experience, but they can be tailored to meet a variety of use cases to help banks hit their KPIs. 

They save valuable time

With AI automation, efficiency benchmarks within the banking sector have been raised to the delight of both customers and institutions. 

With manual busywork a distraction to high-value tasks, chatbots for retail banking not only handle vast amounts of queries on their own but give agents more time to add a human touch to matters that require them.

Indeed, banks could save as many as 826 million hours with chatbots in 2023.

They save money

With greater efficiency comes greater cost savings. 

Banks that decide to integrate chatbots are already tapping into a whole new world of ROI. By automating their customer service and scaling accordingly, chatbots could save banks as much as $11 billion by the end of 2023.

As part of a broader discussion over digital transformation within established institutions, chatbots for retail banking allow them to compete more capably with challengers. 

They enhance user experiences 

Personalized customer experiences centered around convenience, context, and speed are what chatbots for retail banking are made for. 

With omnichannel capabilities across popular messaging apps like Telegram, LINE, WhatsApp, and Facebook Messenger, chatbots are providing not only in-app banking assistance but also meeting your clients in the places they like best.

The correlation between profit streams and positive user experiences is well-documented, and even one extra CX index point can earn banks up to $144 million annually.

They help banks hit their key performance indicators 

The overlap between the benefits of banking chatbots and the KPIs of most banking institutions means it is the perfect way to ensure the pillars of excellent service that are the lifeblood of garnering new clients as well as keeping existing ones happy. 

Here are some of the KPIs banks can expect to hit with the help of chatbots:

  • Engagement rates
  • Efficiency within the organization as a whole
  • Customer acquisition
  • Client retention 
  • Churn

What are some of the best use cases?

Gaining a crucial edge in a highly competitive sector like retail banking needs careful analysis of where improvements can be made, and deficits can be cut. 

Here are some of the ways that chatbots for retail banking can provide an advantage. 

Customer Success

By automating responses to queries with chatbots for retail banking about loyalty benefits, payments, transfers, and other services, banks can turn every interaction into an opportunity to provide excellent and efficient service.

FAQ Automation

With so many common queries happening daily, the ability to automatically answer FAQs about ATM locations, balances, rates, or applications for credits and loans is priceless.

Providing information speedily and conveniently has always been at the forefront of superior customer care in the banking industry.

This is an area where chatbots thrive.

Service Level Agreements

Another area in which chatbots for retail banking offer exceptional ROI is in minimizing first-response times.

It is a critical area of expertise for leading banks. 

With chatbots, the door is always open for escalating priority queries to the appropriate agents. Exceeding expectations in this area is made infinitely more manageable with the introduction of intelligent automation.

Notification and reminders

Keeping customers up to date with new offers, payments, approaching deadlines, credit processes, and any other meaningful activities is non-negotiable, and they expect timely reminders and notifications.

Automating these notifications with a chatbot is reliable and personalized and ensures swift delivery of any updates.

Take your customer service to new heights with AI-powered Chatbots that exceed expectations

Outdated legacy systems are no longer an acceptable means of offering care to your most important asset.

The days of queuing and confusion that have been so prevalent in the old ways of banking no longer serve your clients. They never did. 

But with tech-savvy generations quickly becoming the norm and the shift towards digital transformation in the banking industry, established banks cannot ignore the extensive benefits that are so keenly felt from the introduction of chatbots. 

Talk to us about how we can take your bank into a future of better retention, higher satisfaction rates, and customer service excellence that gives you the edge in an unforgiving age of demand.