From applying for a car loan online rather than in-person at a local bank branch to buying clothes from a mobile application instead of at the mall, today’s consumers are communicating with businesses through digital channels at an escalating rate. And, because of this massive increase in consumer use of smartphones and mobile devices, nearly every industry has gone through a digital transformation to adjust their communication options to meet the increasing expectations of customers.
Cravings for a Digitally Customized Experience
The current shift in the banking industry has led to an interesting transformation in customer communications. In 2014, Juniper Research predicted that over 1.75 billion mobile phone users will have used their devices for banking purposes by the end of this year — and that certainly tracks with current industry trends. Now that customers expect a certain degree of convenience and flexibility when interacting with their financial institution — whether by remotely depositing a check or transferring funds between accounts — financial institutions have found it necessary to update their communication technology to better interact with customers on their terms.
As technology continues to permeate the marketplace, financial institutions are considering artificial intelligence (AI) technology as a way to provide more digitally customized experiences for consumers — namely, using chatbot technology to ensure that customer communications are adapting to the stronger digital preferences of today’s consumers. According to a 2018 study on consumer banking trends by chatbot provider Humley, 44% of U.S. consumers would prefer to speak with a chatbot than a human if it could “answer questions as reliably as a human” — and, what is potentially more striking is that 25% of consumers confirmed their willingness to switch to a new bank because it offers 24/7 chatbot support. It is clear that today’s consumers strongly prefer digital communication channels — or at least having the option for them.
A New Norm of 24/7 Service
With technology pervading nearly every aspect of the consumer’s daily life, it is no surprise that expectations for round-the-clock customer service have significantly increased.
The accessibility of mobile devices has created the expectation for communicating via a variety of digital channels at any time of the day. In fact, Gartner reports that by 2020 — next year — customers will manage 85% of their relationships with an enterprise without interacting with a human. This striking statistic shows how imperative it is for banks to implement digital channels to ease communications with their customers.
Now that consumers can’t seem to live without their smartphones and mobile devices, they prefer to use chat as a main channel of communication (as opposed to a phone call). Forrester states that the number of consumers who use live chat and email support versus picking up the phone to make a call has increased by more than 50% since 2012.
For instance, consider a consumer approaching a bank to ask about the car loan application process. Rather than setting aside time in their busy schedule to pick up the phone and give their full attention to speaking with a branch representative, the majority of consumers today would strongly prefer to have their questions answered through self-service, namely: searching the bank’s website for loan information or web chatting with a representative from their smartphone — whether at their desk at work or during a ride-share commute — to receive the information they need.
To meet this need, AI technology such as the chatbot is being deployed in banks across the U.S. Chatbot technology gives banks the ability to extend their hours of service without hiring additional resources to work around the clock. With AI and chatbots, banks can also automate their customer service for routine inquiries, such as help with resetting online banking passwords, receiving application documents for a mortgage or loan, or transferring funds between accounts.
The Demand for an Elevated Customer Experience
In addition to extending the hours of service and support for their customers, banks are also deploying chatbots to meet the increasing consumer expectations for an individualized, high-touch customer experience. A recent study by American Express found that a whopping 90% of Americans use customer service as a factor in deciding whether or not to do business with a company. The weight that customer experience holds in determining whether or not a customer is satisfied — and maintaining that relationship — is significant.
The boom of mobile devices and smartphones has created a demand for convenient communications — essential to ensuring a positive customer experience. And in today’s banking industry that means providing multiple touch points that enable customers to customize their communication with the financial institution based on their lifestyle.
As a result, banks are using chatbot technology not only for round-the-clock support, but also to enhance relationships and elevate the customer experience in today’s digital era. Although some have feared that AI technology such as chatbots may dissolve established relationships that consumers have with their local bank branch representative, the financial service industry’s experience thus far suggests the opposite. For example, a 2017 AI consumer preference study by PwC found that 27% of consumers were unable to tell if their last customer service interaction was with a human or a chatbot — indicative of this new technology’s ability to enhance relationships and thus elevating the customer experience as a whole. Banks in rural areas can especially employ chatbot technology to enhance relationships and customer experience without the need for customers to travel to a branch location to interact with the organization.
Due to their ability to meet the rising demand for 24/7 service while also improving the customer experience, more chatbots will be prevalent in the financial realm in the coming year. As chatbot technology and artificial intelligence continue to advance, banks are likely to have the ability to use features such as tone and sentiment analysis to digitally customize the customer experience even more.
