Chatbots Will Enable Deeper Engagement and Build Stronger Customer Loyalty

The role of a 'personal touch' in delivering financial services is difficult to overestimate, which made it a challenge in the past to overcome the physical part of banking. The traditional and dominating model of a bank is still a physically spread organization with human customer service representatives. Even increased capabilities of online banking weren't able to diminish the role of a human assistant. Personal interaction has traditionally been the primary method of building loyalty and maintaining customer satisfaction with the service.

Meanwhile, hard work is put in developing a viable alternative to the existing model by large technology companies like Amazon and Facebook. In the years to come, AI assistants in the form of chatbots are expected to become mainstream to maintain strong engagement and customer loyalty on a deeper level and in a more efficient manner. In fact, by 2020, customers are expected to manage 85% of their relationships with enterprises without interacting with a human. Daniel Hegarty, CEO and founder of digital mortgage broker habito, shared with CNBC that AI in the form of chatbots will become mainstream as soon as 2017.

"Expect them to become more polished and human-like, and even more ingrained in the fabric of our daily lives – whether you're ordering groceries from across the kitchen using Amazon's Alexa or transferring money to a family member using a Facebook chatbot," he said. "Bots offer a comfortable conversational paradigm that allows us to get directly to what we need, yet still allow us to interact with them passively. While there's still some hesitation around AI amongst consumers, there is a natural adoption curve of all new technologies."

Data on channel-specific customer satisfaction levels speaks in support for investments in sophisticated personal assistants in form of chatbots: live chat has the highest satisfaction levels for any customer service channel with 73%, compared to 61% for email and 44% for phone. Therefore, chatbots have a potential to become the most favored way of accessing data on personal finances and additional information on financial products.

Some companies are already taking advantage of bots in finances – Trim, MyKAI by Kasisto, and companies which were initially just messaging platforms are actively transforming into all-in-one apps, opening up an opportunity to implement thousands of company-specific chatbots. Reduced costs (while the average cost of a customer transaction via phone is around $2.50, the same stat for a digital transaction is only around $0.17) and cross-selling opportunities are among the benefits for financial institutions that would come with the implementation of chatbot assistants.

Christie Pitts, Venture Development Manager at Verizon Ventures (with companies like SparkCognition, AdTheorent, Q-Sensei, MapD in the portfolio), recently emphasized that Chatbots represent a new trend in how people access information, make decisions, and communicate. We think that chatbots are the beginning of a new form of digital access, which centers on messaging. Messaging has become a huge component of how we interact with our devices, and how we stay connected with the people, businesses and the day-to-day activities of life. Chatbots bring commerce into this part of our lives, and will open up new opportunities.

AI-powered chatbots can become an excellent automation tool, making banking operations more efficient. With NLP and ML capabilities, chatbots will very soon be as effective (or even better) in customer engagement and query handling as a human assistant.

Pitts is not alone in anticipating a lot of chatbots’ future with proper development. Matt Gillin, CEO of Relay Network, shared with Forbes that a customer relationship and communication pattern needs to exist first before you can employ technologies, like bots, to facilitate the relationship further. Gillin suggests that for chatbots to be successful, companies should first determine the specific use cases that could benefit from this technology.

Gillin’s recommendation is that bots are best for scripted transactions or tasks that don’t require a lot back and forth. Chatbots are most effective in situations where a customer is trying to resolve routine issues, complete specific tasks like placing an order, or guiding a user through a multi-step process, Forbes reports. The benefit is the ability to close the loop with the customer along a process, efficiently and in a delightful way, shared Gillin. The ROI is in cost reduction, efficiency and improved customer satisfaction.

Going even further in expectations for chatbots, experts suggest that soon, we will live in a world where consumers have the option to interact with a voice-enabled bot to place an order. Instead of going to a company’s website, users can simply ask an assistant to perform a particular task – whether it's an online purchase or a transaction. Paired with cognitive learning capabilities, such assistants will be able to make predictions on owner behavior and perform tasks before even being asked.