Leveraging the power of artificial intelligence (AI) and the surging popularity of messaging apps, conversational interfaces are enabling unprecedented banking engagement and re-establishing relationship banking. Chatbots are a simple, lightweight solution to a host of legacy banking problems, giving progressive banks and credit unions a competitive industry edge. The arrival of the digital age has disrupted the retail banking industry and altered the relationship between banks and their customers. Where banking once meant interacting with customers in brick-and-mortar branches, new digital banking channels like websites and mobile apps have opened an entirely new way to reach customers and do business. Online and mobile banking have allowed banks to reach customers more easily and frequently, and have given customers unprecedented access to their financial information.
Banking is becoming more convenient thanks to the Internet, and the future of the banking industry is growing increasingly digital. Whether discussing the future of retail banking or the future of mobile banking, technology is playing a larger role in our everyday transactions. The Internet of Things (IoT) is part of this rapid evolution toward the bank of the future, and both consumers and financial institutions need to adapt to these retail and mobile banking trends. Below, we've detailed the past, present, and future of the banking industry as it relates to the IoT, and how these emerging technologies will transform the way we conduct our financial business. Retail banks have actually been using an early prototype of an IoT device for decades: the automated teller machine (ATM).
Artificial Intelligence (AI) is powering the banking industry's ability to increase customer engagement and deliver exceptional customer-driven experiences. Though many banks are still in the nascent stages of application, the use of AI is growing steadily across the enterprise. AI algorithms and advanced analytics are applied to make instant decisions using real-time data. This is to perform complex and intelligent functions associated with human thinking, unlike machines that react to rules-based logic or deliver predetermined responses. By combining and analyzing information from a variety of different sources--including sensors and remote inputs--AI can create a more efficient, informative, and secure banking experiences, delivering high value to the customer and increasing a bank's profitability.
Conversational AI tools or chatbots have come a long way from error-prone level-1 support to becoming a widely used tool in banks' automation and AI strategies. Today, chatbots in banking are being used by Wells Fargo, Capital One Bank of America, HDFC Bank, HSBC, CBA, and many other leading global banks. The contribution of these chatbots is noteworthy. Consider this: Bank of America's chatbot Erica has served over 35 million customers, and HDFC's EVA engages in over 20,000 conversations every day. The overall impact and growing importance of intelligent chatbots can be understood if we look at the report from Gartner, which suggests that by 2020, customers will prefer to resolve 85% of their problems with an enterprise without interacting with support staff.
With consumer expectations increasing, the use of artificial intelligence, machine learning and chatbots in banking is also increasing. Banks and credit unions worldwide are testing new applications and deploying new solutions to improve the overall digital customer experience. Subscribe to The Financial Brand via email for FREE!More and more banking organizations are leveraging artificial intelligence to launch chatbot solutions, reducing costs and serving increasingly tech-savvy consumers. In many instances, chatbots are developed to facilitate two-way communication, replacing channels such as phone, email or text. The objective is to provide quick service and transactional support.