Banking with personality

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The future of banking is conversational

People don’t stand for inconvenience these days. We buy everything from shoes to fridge freezers at the swipe of a screen. We stream films on the day of release and watch entire boxsets in one sitting. We don’t wait to catch up with friends in person – we send a WhatsApp message or FaceTime with them wherever we are. We like to manage our lives from our devices, when and where it suits us.

Why, then, do we still expect customers to make the journey to a bank branch during a busy work day or, worse, wait on hold for a call centre agent who may or may not be able to help? Traditional banks are struggling to adapt to this “always-on” culture, while customers are beginning to expect it. Both sides are losing out.

New fintech start-ups have sprung up to provide digital-only services and experiences, assuming people simply want convenience over conversation. But while these digital banks have attracted large volumes of new customers, the average balance is low; it seems people aren’t quite ready to break up with the big banks completely.

The conversational bank

There is another way. Banks – big and small – can design for engaging, meaningful interactions that take place when and where the customer chooses. It’s called conversational banking. Done well, it helps banks to build a deep understanding of customers’ evolving needs through a dialogue sustained over years – and allows customers to manage their finances in a way that suits them.

Conversational banking is the use of highly-capable virtual agents, underpinned by customer data and cleverly-applied AI, to make digital banking personal. By adopting this approach, traditional banks – with their legacy infrastructure and heavier cost bases – can stay relevant in the face of fintech start-ups and internet giants. And they can satisfy a diverse customer base from long-served customers to those just joining the market.

Who am I talking to?

It’s useful to draw distinctions between the types of technology available to meet different needs. A chatbot is a computer program that simulates a human conversation. Their capabilities vary widely, but they usually involve single-turn exchanges whereby the customer’s speech is mapped to a selection of key words that are, in turn, mapped to specific tasks.

A virtual assistant or conversational agent is a more advanced operator. They use natural language processing to sustain a nuanced conversation, responding to the customer’s unique needs and getting to know them better over time. Increasingly these are used in call centres, with the caller seamlessly passed to a person if the virtual assistant can’t solve the problem. A virtual assistant might interact in such a human-like way that the customer believes they are talking to a real person, although experience shows that transparency is always key – trying to dupe customers is certainly not the way to build trust.

Closer relationships

When banks underpin customer care with AI and invest in human-centric conversational design at scale, they open up their potential to forge meaningful, long-term relationships with new and existing customers – while keeping their cost base down.

The idea is that, free to chat to the bank in their own time and in relative anonymity, people reveal their financial needs through conversations with virtual assistants. By sustaining this conversation over a long period of time, the bank establishes the type of one-on-one relationships with customers that are difficult (and costly) to achieve through human interaction alone. Over time, the bank learns how to leverage these relationships to best serve their customers’ needs; the virtual assistant works side-by-side with the customer at a fraction of the cost of a dedicated manager.

Combining its deep industry experience with expertise in artificial intelligence, automated processing and elegant design, IBM is already delivering conversational banking experiences with tier 1 banks around the world. These banks are reaping the benefits, with up to 80% of calls to contact centres deflected to super-smart virtual assistants and loyalty scores rising.

Increasingly, banks are viewing virtual assistants as essential to engaging with younger customers. Chat and social media are the channels of choice for many people. On that basis, IBM’s client Orange Bank decided that chat would be its primary customer service channel.

When conversational banking is done well, customers get the service they want to run their lives efficiently, and banks get the close customer relationships they need to stay relevant.