Today, there are tremendous changes of the financial industry due to new trends in AI and machine learning in the financial industry. Of these, a notable innovation is the chatbots, which has turned out to be instrumental in transforming the customer service aspects.
In this regard, most of the financial institutions have adopted this technology since it enables them to support their clients in a more efficient way by automating routine tasks and providing instant support as well as improving the overall customer experience.
Through end-user research, this article aims to understand the position of chatbots in the field of finance, opportunity, key use cases, and further development of-chatbots in the finance.
It involves the use of artificial intelligence and natural language processing techniques in order to develop interactive interfaces that mimic human-to-human conversations, thus giving customers instant replies to their queries. First, chatbots became more simple and could work only with a limited amount of basic functions.
However, great progress in technological innovation has been made in the recent past, and the chatbots now are intelligent systems that can apply languages’ context, develop from interactions, and even perform operations.
In the finance industry, several banks, insurance and investment firms among other financial institutions are now employing chatbots to improve customer experience and increase efficiency while cutting on costs.
By its very nature, one of the stronger points of chatbots is the option where it is available for service 24/7. Since it is a chatbot, it can delegate services at any time and, unlike a human agent, can work around the clock. This kind of unbroken service increases customer satisfaction and trust because customers know that they will be attended to ,any time, they feel the need to access the services.
They are programmed in a way that they can entertain more than one query at a time, and this means that they can take less time to address a customer’s concerns. This is especially important in the finance sector, whereby timely information can influence financial transactions, customer satisfaction levels and the overall business performance.
Challenges: Cost savings: Chatbot implementation can significantly lower expenses for financial institutions — up to millions of dollars annually, depending on the volume of transactions and the scale of technological disruption in the company.
Since they are able to perform simple operations, and respond to a great number of questions and concerns at the same time, the chatbots app has a rather high demand for customer support staff. It means institutions are able to manage their funds appropriately as a result of such efficiency.
Applying customer databases data for further interactions, chatbots may also provide individualized services and conversations. The personal touch improves the clients’ experience and they appreciate the fact that they are not just numbers, but they have unique needs that someone has taken the time to discover.
By engaging the customer, it is possible for the chatbot to capture data from them, which would then be useful information for the firm in understanding the kind of customers the firm deals with, what they prefer and the challenges they face.
Banks and other financial institutions can employ this data in offering better services as well as coming up with correct marketing strategies to market their services to consumers.
They are most commonly employed to answer customer queries, checks account and transaction details, or to perform a transaction. This can help in responding to commonly asked questions, helping the customers to complete a process, and even solve problems that a customer may encounter. Such automation facilitates a shift from the routine and low-level tasks to more technical and complex calls.
Self-contained artificial intelligent-powered communication interfaces can detect transactions in real-time and screen for suspicious flows. Conversing and interpreting behaviors and patterns, potential fraud schemes can be immediately flagged to customers and the financial organizations to take relevant actions accordingly.
Loan and credit applications are some of the areas where customers need to follow certain procedures, complete a series of forms or questionnaires and be informed of their compliance with the criteria of a particular bank or company; chatbots can automate all these processes. This automation relieves time for the management and efforts in processing the applications and boosts the customer satisfaction.
They provide customers with recommendations based on the researched information, customer, profiles, risk levels, and the market situation. They can also inform clients about any updates in the portfolio, recommend changes and address any queries about investments that a person may have; thereby making the process of financial planning more convenient and less time-consuming.
In the insurance sector, chatbots can be useful in policy-related issues, claims, status of an insurance claim, and insurance renewal. They can help the customers to file a claim, inform him or her of the status of the claim and even recommend a policy that suits him or her.
They can provide information on claims, updates on the progress of these claims, and even offer suggestions on policies to take depending on the customer’s situation.
NLP comes in handy in communicating with customers and interpreting their questions to the chatbots. NLP helps chatbots understand the context of the specific interaction and the intent of the client, thus, the given response is quite relevant.
Automated conversational agents can use data and prior exchanges with users to modify their responses to provide better experiences in the future. The opportunities of customers’ interaction with chatbots allow the program, depending on the data or feedback received, to modify its responses and improve the likelihood of its correctness according to the customers’ demand.
This paper focuses on how chatbots are inserted into the finance field and connected with other back-end solutions, including Customer Relationship Management (CRM) systems, transaction databases, and account management systems. This integration enables chatbots to work with the normal and up-to-date information to tackle and help all the customers.
Those in the financial industry have to ensure that great levels of security and compliance with the rules are observed. Social media chatbots have higher security measures like encryption and authentication to prevent the leakage of customers’ trust information. Also, they are designed to follow industry codes and guidelines all throughout their programming.
That said, chatbots have many advantages but they also present the opportunities and the constraints that are important for a financial institution to address suitably.
It is also important to make sure that the information that is given by these chatbots is correct and reliable, seeing that errors can cause massive losses or other complications especially in matters concerning finances. Monitoring and introducing tests, editing are critical to keep the effectiveness of the chatbot up to the mark.
There could be customers who would not like dealing with the chatbots for support and rather prefer speaking with a human being. Thus, it is possible to come to the this conclusion about the factors that contribute to the level of customer acceptance:
Although such messaging with bots is highly effective when it comes to answering simple questions, the answers to complicated or more specific ones may not be easily provided. These cases should be taken to human agents in financial institutions but institutions should possess measures of handling such matters.
First of all, it is crucial not to lose sight of the fact that the client’s information should be guarded. Due to the nature of valuable data exchanged by customers and the institutions, there should be proper measures on how to develop secure chatbots and conform to data privacy regulations.
It is very clear that the use of chatbots in finance is still in its infancy and that with the continuing developments in the areas of artificial intelligence, machine learning, and natural language processing, the performance of these tools is set to improve in the future. Here are some trends to watch for:
In the future, more sophisticated chatbots will continue providing enhanced customized services by leveraging full and accurate customer analysis/passive analysis data.
The new feature of voice command implies that the chatbots will have the ability to conduct conversations with the clients through voice to improve natural interaction.
The next generation of chatbots will be of the preventive type and not of the reactive type since they will be able to identify customers’ problems before they occur. Thus, it may include informing a customer of a possible overdraft of his/her account or an opportunity to invest in a promising stock on the market.
This is because the advancement in other tech fields opens opportunities to work in synergy and enhance services and security such as blockchain, biometrics, Augmented Reality and more.
A popular concept in the finance industry is the use of chatbots, which can be effective in streamlining customer services due to their accessibility around the clock, comparatively low cost, and improved client relations. As these functions provide support, can work with data in real time, and also can perform routine tasks, chatbots enhance the ways banking companies work.
With constant advancements in AI and other technologies, the functions and possibilities to use chatbots within finance will only increase therefore, making the future of customer service improve in the finance sector.