Chatbots, as the primary engagement tool for digital banking, were widely adopted during COVID, but many banks soon realized these were stopgaps – not real solutions. Our research, based on a review of more than 24 million customer questions, showed that the chatbots bank customers were using weren’t meeting customer demand for more personalized interactions and intelligent experiences.
While some chatbots offer a level of personalization, including spending insights, what is offered doesn’t go far enough — as our qualitative research also revealed. In addition to a review of 24 million customer questions, we carefully selected 3,700 actual banking customers from the top 15% of the most engaged users of chatbots across a number of financial institutions, to understand how chatbots were perceived.
Three key issues surfaced that limit the adoption and utility of chatbots:
- Opaque instead of discoverable: Customers don’t know what they’re capable of, so information effectively flows into a “black box” without context or meaning.
- Generic instead of personalized: Communication is non-specific, broad and does not factor in personalized financial or behavioral history.
- Reactive instead of anticipatory: They depend on customers to report service issues or file a complaint.
What they wanted was to be known by their bank – as something more than an account number. The next generation of chatbots should provide:
- Optimized Discovery: Proactive features that showcase digital intelligence.
- Hyper-personalization : Smart interactions based on deep contextual insights.
- Humanizing Engagement: Natural conversations that exceed expectations with remarkable experiences.
Given the broad range of services and contextual experiences expected, ‘chatbot’ describes a fairly limited set of tasks. Despite many years of evolution, today’s chatbots still deliver “what”-oriented responses, which are very service focused, and don’t provide much value to the banking customer. For example, “What was my last payment?”.
A more inclusive term for what a chatbot should do is intelligent digital assistant. Think of it as a conversational AI-enabled “banking assistant,” trained to handle various types of inquiries, while proactively delivering insights and information. It can initiate them and provide contextual advice. Because they have a holistic understanding of banking and financial services, it uses its understanding of individuals’ financial and behavioral data to anticipate client needs, crunch numbers where appropriate, and because of its “ambient awareness” of the background context, it can tailor the conversational experience accordingly.
Instead of static, generic answers to a question, digital assistants should offer deep insights into a customer’s personal financial situation, which can include information on their spending habits, savings recommendations, or credit score improvements. It delivers personalized conversation starters based on its knowledge of a customer’s unique situation as well as their behavior patterns.
Intelligent digital assistants can take the typical chatbot experience from answering mere “what” questions to “why”. For example, to address why a customer’s balance is low in a given month, the transaction history could be analyzed to respond by saying “Your balance is low because you overspent on transportation last month,” or “Your rent has increased, and so have your utilities.” Finally, it offers contextualized and relevant responses, along with tailored next best actions. For example, instead of simply displaying account information, it may ask the customer about recent activity that impacted this outcome.
These assistants go beyond chatbots to enable banks to deliver at-scale personalization, and cultivate an interconnected, always-on relationship with the customer.
Those who picked up the digital banking habit aren’t going back — mobile banking users already stand at 169.3 million users, or 65% of the population. While the traditional banking experience may not disappear entirely, service interactions are likely to take on a different character. It’s time for banks to consider a bold new approach to the banking experience — one where conversational AI-powered technology handles the lion’s share of daily tasks, leaving bankers to handle complex tasks and build value. The intelligent digital assistant is a pivotal component to help banks build a unified digital banking experience.
