Impersonal banking! Yes, that’s how banks are serving you quicker now

The transition from traditional channels to conversational banking is upon us with several banks relying on chatbots. And, what a journey this has been for chatbots since ELIZA

Every organisation today aspire to achieve optimum efficiency, simpler operations and lower cost. Now imagine a virtual agent that could streamline your work processes and take care of your customer service without requiring much of human intervention! Known as chatbots, these virtual agents are being deployed increasingly by enterprises of all sizes including financial organisations. Over 50 per cent of medium to large enterprises will have deployed product chatbots by 2020, says a study by research firm Gartner Inc. Customer service and customer engagement have become the most important parts of businesses, but the process of conventional customer support is exasperating. The support agents have limited resource and knowledge to solve customers’ issues. This gap between brands and their customers is bridged by chatbots. With the advent of chatbots and voicebots, conversational commerce has surged tremendously across different verticals of business, especially in financial institutions.

Among the reasons why chatbots are being considered increasingly are the convenience and the time taken to resolve issues. Powered by artificial intelligence, these chabots can reduces or eliminate the need for multiple mobile apps, as the answers are stored inside the chatbot. The next generation of chatbots store, create and recall important communication. The idea is that if they have a positive interaction with a company or brand, they are more likely to return.

Finance bots

Consumers today are tech savvy. Hence, banks too need to be competent and up-to-date with consumer behaviour. Customer acquisition is also a major reason for chatbots now being an essential asset for finance houses. Additionally, they work round the clock with no complaints.

As more customers get engaged on digital channels, virtual customer assistant (VCA) is being employed to handle them. According to Gartner Inc., organisations report a reduction of up to 70 per cent in call, chat and/or email inquiries after employing a VCA. They also report increased customer satisfaction and 33 per cent saving per voice engagement.

The purpose of chatbots is to support business teams in their relations with customers. Additionally, they help save a lot of money. The fact that these bots can be placed in places like Facebook Messenger, Slack, Telegram, SMS or on one’s own website allows businesses to reach a bigger audience.

Several factors work in favour of chatbots. For starters, they are available round the clock. They are replacing live chat and other forms of contact such as emails and phone calls. They can simultaneously have conversations with thousands of people. They are a one-time investment and help in functioning with lesser staff.

Chatbots are bound by some rules and obey them as long as they are programmed properly. They always treat a customer in the most polite and perfect way no matter how rough the person is.

Chatbots help automate tasks which are to be done frequently and at the right time. They can also be used as sales assistant by people needing product knowledge and suggestions on financial products. This would also add a personal touch to the entire experience. They are programmed to remember all chats with users and provide them relevant choices the next time they visit. They also generate better leads for users after asking necessary questions. This in turn results in higher conversion rates.

Praxis Global Alliance, a global business analytics, research and advisory firm that works on designing chatbots for financial services firms on their machine learning and conversational systems, states that these projects fall within the realm of single view of customer, frontline/sales empowerment, consumer/SME lending, marketing personalisation, customer service and internal process automation. Typically, these projects often have less-than-a-year payback and lasting cost benefit.

Its director Aryaman Tandon says, “Chatbot-based customer support can reduce wait-time for consumer to milliseconds and bring down cost of service for the institution by reducing the need for call centres. Chatbots can also scale to millions of customers as compared to traditional call centres. All of these enable lower costs of service as well as enhanced customer satisfaction and loyalty.” He points out that on the internal functions part, chatbots can serve as efficient “agents” who retrieve and deliver information, conduct routine maintenance/checks, and automate routine processes. “This frees the company professionals to focus more on what matters to the business,” he adds.

Overall, the importance of artificial intelligence and chatbots based on it is growing. Their relevance is the strongest within areas of customer service, marketing, internal processes and risk profiling. Within customer service, bots reduce the load on call centres. According to the Juniper statistics, on an average, four plus minutes are saved per enquiry compared to traditional call centres. In marketing, bots enable personalised offers and conversations. In risk profiling, AI systems are able to better forewarn potential default and fraud.

Bots are just conversational commerce programs which are made with a combination of AI, natural language processing and machine learning. Natural language processing broadly refers to the study and development of computer systems that can interpret speech and text as humans naturally speak and type it. Machine learning in the context of text data analytics is a set of statistical techniques to identify parts of speech, entities, sentiments and other aspects of text. Bots are programmed in such a way that they are capable of making conversations with users and learning from the interactions they have with them. This is possible because of NLP and machine learning, where data analytics plays a very important role.

In simple words, chatbot is an AI-based computer which provides conversational environment to exchange information with customers without human assistance. AI-based bots are being designed for both voice and chat. Financial institutions are deploying more bots to improve customer experience and reduce cost of service for both retail and corporate customers.

Customer experience

Chatbots fit well in the banking environment. Bank of America has Erica, a well-known chat-based assistant. This chatbot can even help customers pay bills and manage FICO score. Capital One has Eno which is a text-based assistant available on the smartphone app called Eno App. On this app, customers can carry out a number of banking transactions such as card bill payments and services related to credit limit. Ally bank launched its chatbot, Ally Assist, in 2015. This chatbot works alongside the online banking app, Ally Mobile Banking. JP Morgan Chase has a unique bot called Coin which is more than a customer assistant; it works as back office tool and does different tasks such as managing complex legal data. It can also handle tech queries.

Advocating the chatbot scenario in banking, Umesh Agrawal, CEO and founder of JollyApp, a conversational commerce platform, says, “AI chatbots are widely accepted in industries that are looking to automate their customer service support. The adoption of chatbots by financial institutions, like most business tech adoption, is likely to be driven by three factors: lower costs, improved technology and better customer service (connect with clients and increase sales). A major roadblock is the overall inconsistency, and specific lack of chatbots that can easily interpret and respond to natural speech. Companies understand this obstacle. Since employing chatbots (rather than humans) can significantly cut business costs, there will likely be more investment in not just producing chatbots, but the types people want to interact with. The implementation process of AI Chat will likely be much more gradual.”

In India too, many banks have deployed chatbots for differentiated customer experience. Kotak Mahindra launched AI-based voicebot Keya and HDFC Ergo launched AI-enabled chatbot DIA on Amazon’s cloud-based voice service Alexa.

In partnership with Massachusetts-based Nuance, Kotak has deployed India’s first AI-powered voicebot which comes integrated with its phone-banking helpline and transforms the traditional interactive voice response (IVR) system. In the first month of deploying this chatbot, over a million customers have interacted with it and it has notched up more than 85 per cent customer satisfaction score. As customers see value, self-authentication has increased by five per cent, as has self-service mode on the IVR.

Through the call steering module, customer journey on IVR has become seamless, says Puneet Kapoor, senior executive vice-president of Kotak Mahindra Bank. “On an ongoing basis, as we start getting more insights on consumer behaviour through Keya, we will continuously review and add more use cases and enhance accuracy. We continue to keep adding more responses to the library based on customer queries to automate more responses,” he adds.

According to a report of Google and KPMG, Indian language internet users will drive the next phase of internet adoption in the country and will be more than 2.5 times of English internet user base by 2021. Therefore, bots are also being designed in different languages. For now, Keya is bilingual and interacts in Hindi and English. The bank is building grammar overtime with natural language understanding. “AI will be able to power wider and more complex conversations. You will hear from us soon on that,” Kapoor adds.

According to a recent report by Deloitte, touted as a rapidly growing hub for connected devices, the market for “Internet of Things” (IoT) in India is expected to grow to USD 9 billion by 2020. Keeping this in mind, HDFC ERGO General Insurance Company launched DIA, an AI-based chatbot service, on Alexa. Ritesh Kumar, MD and CEO of HDFC ERGO, says, “At HDFC ERGO, we believe in constant innovation that will benefit and redefine the user experience. We envisage a paradigm shift in the way humans interact with technology. This integration of ‘DIA’ with Alexa has been programmed to provide customers with a seamless experience to reach out to HDFC ERGO for insurance-related services, simply by using the voice interface.”

HDFC already has Eva which was deployed last year and is doing extremely well. State Bank has Sia while ICICI Bank’s iPal also has search feature integrated in it. Yes Bank has Yes Tag which allows users to transact through five social messaging platforms. Axis has Axis Direct WhatsApp Virtual Assistant which gives market updates and stock info on the social media platform.

What bots do better

While banks are deploying bots and AI for their growing numbers, experts say they should have the clarity on why they need the bot. The key thing to keep in mind while implementing these systems is the use. Clarity about the purpose for which they are built makes it easier to design them and have the intended impact. Tandon says, “In cases where customers interact with a bot over voice, it is important to ensure that the talk feels “natural”. The other critical thing is the “AI” behind the bot, where decision-making should not happen until it is highly parameterised and takes care of all exceptions possible.”

Implementing AI chatbots has a significant advantage due to the massive level of conversations they could perform with users, but it is very important that the answers or replies given by chatbots are validated and relevant. “When your chatbot gives the wrong answer, it needs to have someone to correct its understanding. Therefore the most important factors to keep in mind while implementing chatbots are the role of machine learning and NLP, the system to self-learn and self-improve,” says Umesh Agarwal of JollyApp.

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  1. Thanks for writing about chatbots. Definitely bots have the exciting future when it comes to customer engagement, transactional and conversations commerce domain. Given the bot technology is still evolving and we do need to focus on better user experience, business integration… We at Engati have started this evolutionary journey. Do visit us and provide us with your valuable feedback at http://www.engati.com as we strive for more mainstream acceptance of this technology of the future.

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  1. Thanks for writing about chatbots. Definitely bots have the exciting future when it comes to customer engagement, transactional and conversations commerce domain. Given the bot technology is still evolving and we do need to focus on better user experience, business integration… We at Engati have started this evolutionary journey. Do visit us and provide us with your valuable feedback at http://www.engati.com as we strive for more mainstream acceptance of this technology of the future.