conversational AI

How Is Conversational AI Breaking the Barriers to Financial Inclusion?

Conversational AI can play a crucial role in transforming banking for the masses, driving financial inclusion, and improving the customer experience.

The banking industry is undergoing significant transformation due to technological advancements and changing consumer behaviours, while financial inclusion remains a critical challenge.

The banking industry is at a crossroads for profound, long-term, and all-encompassing transformation. On the one hand, the pace of technology and shifting consumer behaviours have caused upheaval in traditional banking business models. The COVID-19 epidemic and its push to adopt digital-first activities have further accelerated these tendencies. On the other hand, financial inclusion remains a pressing issue: out of the world's 8 billion inhabitants, some 1.4 billion people remain unbanked. Financial inclusion is a critical component of economic and social growth, and digitization is a game-changer in this regard. The pandemic-caused digital explosion has highlighted the vital role that digital infrastructure can play in delivering services to people quickly and effectively, already contributing to enhanced access to financing.

The Advent of Conversational Banking

According to McKinsey, the era of the "AI bank of the future" is here. This means that building on its current momentum, the banking sector is poised to further employ novel technological support tools such as conversational AI to interact with and serve consumers in fundamentally new ways, cutting their cost of doing business while growing their profits. Conversational AI is already changing how businesses run by streamlining procedures, boosting consumer relations, and cutting overall costs.

According to Gartner, the volume of interactions handled by conversational agents has surged by up to 250% in many industries since the pandemic, with enormous potential for future expansion. If the worldwide conversational AI market was valued at USD 136.55 billion in 2022 and is projected to expand at a compound annual growth rate (CAGR) of 37.3% from 2023 to 2030.

A New and Changing Customer

Customers' expectations and demands have risen in recent years. Once having a multitude of options at one's fingertips via the ubiquitous smartphone became the norm, the customer experience has shifted to one that massively relies on technology. Customers today want rapid, tailored, always-on experiences supported through their preferred channels and in the manner they choose. Their willingness to try out new forms of online communication has expanded dramatically across all age groups, ethnicities, and other consumer demographics - and once they've tried it, few are eager to return to more traditional ways of communication and service. According to Forrester, customers who used digital channels for the first time during the pandemic will continue to do so, resulting in a 40% increase in the number of digital contacts.

Due to its various procedures and regulations, the banking business has typically been inelastic to such changes in client expectations and demands. However, with changing customer generations and a more forceful demand for an exceptional customer experience, the sector can no longer afford to ignore the need to change. Customers nowadays rate a bank based on more than just objective service quality; they expect an above-average customer experience defined by three major main indicators: accessibility, personalization, and speed.

  • Customers desire the convenience of being able to access their financial services from any location and any device.
  • Customers expect personalized and relevant experiences that meet their needs at every stage of their journey.
  • Instant assistance is also critical for digital clients, who want 24/7 access to their money and real-time assistance tools whenever they need them, regardless of typical business hours.

Banking Financial Experiences Conversational AI

Incorporating conversational AI solutions can assist banks in developing the capabilities required to keep up with modern expectations and provide a better client experience. The time for change is now: 86% of banking executives predict AI will be commonplace in their sector by 2025. AI-powered virtual agents present banks with a tremendous opportunity to engage with consumers proactively, stay relevant, provide real-time help, and create an authentic, customized experience. Furthermore, a more robust, deeper digital presence can help banks win new customers by reaching out to segments of the public previously ignored by the service portfolio, thereby driving financial inclusion and, ultimately, more global economic growth.

How Best to Use Conversational AI in Banking?

Get Closer to Your Customers

Conversational AI provides customers with a level of convenience previously unimaginable in the banking industry. Customers may now get help when and where needed, thanks to the ability to access information and support anytime and through any channel. Additionally, conversational AI is much faster than traditional customer support methods, allowing customers to receive answers in real-time. A more relevant aspect is also that conversational assistants can be made available in a variety of languages, which increases their accessibility to a much broader audience, including individuals who may have previously faced linguistic obstacles. Such language possibilities provided by AI-powered conversational systems enable financial service providers to expand their reach beyond their borders and become truly global.

All of these advantages make conversational AI an indispensable tool for banks seeking to provide excellent customer service and boost overall customer satisfaction. As technology advances, it will become an even more vital aspect of the banking business, driving innovation and meeting evolving client needs.

Empower Your Customers

Conversational AI has the potential to revolutionize the way customers interact with their banks by empowering them to take control of their finances. Through self-service applications powered by intelligent virtual assistants, customers can access their accounts, check their balances, transfer funds, and even apply for loans or credit cards without the need for human interaction. This not only offers customers greater control over their financial affairs, but it also frees up bank employees to focus on more complex tasks, such as fraud prevention and risk management.

Conversational AI can also provide customers with personalized financial advice and recommendations based on their transaction history and financial goals. This level of customization enables customers to make informed decisions about their finances and helps them to achieve their financial objectives.


Build Trust and an Emotional Connection

Conversational AI technology, in the form of AI-powered virtual assistants, provides a unique opportunity for banks to support their customers and build trust. By acting as virtual financial advisors, conversational assistants can offer users fast and straightforward support and advice, making money management less confusing, complicated, or time-consuming. With personalized recommendations and relevant information delivered instantly through conversational channels, these conversational AI assistants can empower customers to make smarter spending decisions and improve their overall financial health. They can track spending habits, offer standard recommendations for better money management, and explain complex finance terminology using more straightforward language, saving time and reducing misinformation. By providing this level of personalized support, conversational AI assistants can improve customer satisfaction and build trust, making them an essential tool for banks looking to stay ahead in an ever-evolving industry.

Keep the Connection Strong

AI-powered virtual assistants have emerged as a powerful means of engaging customers. By initiating conversations, understanding customer queries, and providing instantaneous replies, conversational AI assistants are helping banks to attract new customers and generate leads. Conversational banking leverages this technology to assist visitors on bank websites and provide relevant notifications to customers when they log into their accounts. The virtual AI assistants can capture leads from these interactions and forward them to the sales team for follow-up. In this way, conversational banking powered by AI is proving to be an effective tool for customer engagement and acquisition.

Banking Conversational AI Customer Experiences

Make It Easy

One way conversational AI simplifies banking processes is by enabling customers to open new accounts, update information, and perform other transactions through frictionless online channels. By simulating a human-like interaction, intelligent virtual assistants provide customers with a user-friendly experience that eliminates the need for complicated paperwork and in-person visits to the bank. This level of availability and convenience is particularly beneficial for people living in remote rural areas or who are less educated, people who may otherwise not have easy access to traditional banking services. By providing remote banking solutions, conversational AI is helping to reduce the number of unbanked people and promote financial inclusion.

Show You Are Listening

Customers' time is precious, and asking them to fill in lengthy surveys or feedback forms can be frustrating to the point of alienating them from the services the bank provides. However, using AI-powered agents offers a more convenient and efficient way to engage customers when it is suitable for them. Such conversational AI solutions can be integrated into websites or apps to gather customer preferences and opinions. Based on the feedback collected, they can then redirect the conversation towards relevant products or services, which enhances the overall customer experience.

Some banks already use virtual AI assistants to ask questions in a conversational manner, which helps to keep customers engaged and increases the submission rate. The conversational nature of these AI-powered assistants makes them more dynamic and engaging, resulting in a higher rate of feedback collection and allowing banks to gain a better understanding of their customers. Here's an example:

BT Case Study

Free Up Time

Conversational AI has the potential to free up valuable time in the banking sector, to the tune of an estimated 862 million hours, allowing banks to focus on more complex tasks and improving overall productivity. By automating routine tasks and inquiries, virtual AI assistants can handle customer support queries, transaction processing, and other tasks that would otherwise require human intervention. This level of automation not only reduces the workload for bank employees but also frees up their time to focus on more critical tasks, such as fraud prevention and risk management.

Moreover, conversational AI can improve the speed and accuracy of banking processes by removing the possibility of human error. Virtual AI assistants can quickly and accurately process transactions, ensuring the correct information is always entered. This level of accuracy is essential for maintaining compliance with regulations and preventing errors that could result in financial losses or reputational damage.

What Comes Next?

Conversational AI promises to open a daring new frontier for banks to transform client relationships. Conversational AI assistants are changing how clients interact with their banks by providing tailored financial advice, simplifying banking operations, and collecting helpful feedback. As banks continue to adopt and refine their use of conversational AI technology, we expect to see even more novel applications that will further enhance the customer experience and build stronger, more meaningful relationships. Undoubtedly though, banks that adopt conversational technology will be better positioned to satisfy the requirements of their customers and thus stay ahead of the curve in a fast-moving global market.


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