April 12, 2022

Chatbots in Banking: Pros and Cons

It is estimated that banks and fintechs will use chatbots to automate 90% of interactions with their customers by the end of this year, and although chatbots are a great way to save money and improve efficiency, there are still some drawbacks. 

By learning more about these pros and cons, you can determine if artificial intelligence is the right choice for your company. 

Pros of Chatbots

Here are the top pros of using chatbots in banking. 

24/7 Availability 

One of the biggest benefits of using chatbots in the banking industry is that it offers 24/7 availability for your customers. People might experience problems with their accounts at any time of the day. 

If they’re dealing with these problems outside of regular business hours, they may not be able to get the immediate help they need. However, customers can use chatbots to answer their questions immediately.

Brand Consistency

Brand consistency is an important part of any business. It allows your customers to easily recognize your company across all of your marketing channels. 

Using chatbots for your customer service will help you have consistent messaging with your customers. This is because you will have one voice and one tone for all communications with customers. 

It will also ensure that your messaging stays the same for each customer! With human operators, there is a chance they will begin to get fatigued when they are dealing with customer service issues for hours on end. Chatbots can help you avoid errors.

Increased Productivity

Another great benefit of using chatbots is that it will increase the productivity of your other banking employees. Rather than having each of your employees help with frequently asked questions, you can allow a chatbot to take over all of these responsibilities. 

This allows your employees to focus on more complex queries that can help your bank run smoother.

Reduced Staffing Needs

Often, banks have peak times and require extra staffing for busier times during the day or during specific seasons. In these cases, they need to have extra employees scheduled to deal with the higher volume of calls. 

Chatbots can help you avoid these peak times because they will always be able to provide consistent responses, even when more people are requesting information.

Consistent Response Rate and Availability

Not only do chatbots help you maintain productivity during peak times, they also help you keep consistent response rates and times for your business. These bots can run smoothly whether you have high or low volumes. 

In turn, this will help you improve your customer experience because customers don’t have to worry about being kept on hold for hours to get their questions answered. 

Helps With Fraud Prevention

Financial institutions have a responsibility to provide data protection for their customers, and chatbots can also help with this by preventing frauds. When the system detects suspicious activities on users accounts, chatbots can notify customers immediately so they can validate transactions or notify if their account has been hacked. 

Banks can also use conversational AI to track transactions and more. This way, your customers will be protected financially from fraudulent activity. 

Chats Can Be Saved

When you use chatbots for your business, messages can be saved. This can help you provide a paper trail to help with quality assurance. 

Plus, this can help you learn more about your customer's history with your bank. You easily can look back at past messages to learn more about past complaints or other issues they’ve had with your business. This can help you make informed decisions about how to improve your customer service. 

You can even automatically send your customers transcriptions of their interaction with the chatbot. This way, they will not have to worry about remembering what they were told during their conversation.

Lower Costs

Finally, using chatbots for your business will help you lower your costs. As a business owner, every employee that you hire costs thousands of dollars to train and recruit.

On the other hand, chatbots are able to handle more conversations with customers at a lower cost. This means you will not have to have as many employees working in your customer service department. 

Plus, this frees up your live agents to work on higher-value interactions which will help your company make more money in the long run. 

Cons of Chatbots 

While chatbots provide many benefits to organizations in the banking industry, there are some drawbacks. Considering each of these can help you find the best customer service solution for your business. 

Here are some of the most common drawbacks of using chatbots for banking. 

Questions must be programmed beforehand 

When customers use chatbots, they need to ask questions in specific ways to be able to get accurate answers. Chatbots can only answer questions that have been programmed previously. This downside however, can be eliminated by connecting an effective live agent solution to your CX strategy and adding unresolved questions to your chatbot’s knowledge base.

Impersonal

Most Chatbots use structured flows to provide answers. This can make the experience robotic and feel less personal. Answers that are 100% scripted, don’t allow flexibility when it comes to regionalisms and different ways of asking questions. 

Plus, chatbots lack the authenticity that a human can provide, so your customers may not feel like their needs were met or that their complaints were heard. 

Must Keep Information Up-To-Date

Chatbots without artificial intelligence can only provide your customers with answers to questions that they already know. It is up to you to input new information for chatbots to use. 

If you don't keep this information up-to-date, your chatbot may be sending incorrect messages to your customers. 

Technology Issues

There can also be some technical issues when it comes to using chatbots for banking. First, chatbots require your customers to use the internet. If you have customers that do not have access to the internet or are unsure of how to use an online platform, it may not be an ideal customer service solution. 

People need to be more tech-savvy to use a chatbot than to make a simple phone call or interact with a customer service representative in person. 

Finally, there are other common mistakes that people may make which can make it difficult for chatbots to function correctly. For example, a chatbot without conversational IA will have trouble understanding misspelled words and therefore will not be able to provide the right answer.

Needs Additional Measures to Protect Identities

Finally, using a chatbot for your banking services may require additional measures to protect the identities of your users. This is because they may be sharing private or sensitive account information. 

You will have to find ways to confirm that your user is actually who they say they are. This will prevent you from sending sensitive information to the wrong people.

Looking for Digital Customer Service Options? 

While banking chatbots have pros and cons, the benefits will typically outweigh the drawbacks. By partnering with the right conversational AI solution you can save time and money while providing outstanding customer experiences.

Take a look at how we have helped many banks and fintechs around the world.

Are you looking for new ways to improve your CX?

Our customer service solutions powered by conversational AI can help you deliver an efficient, 24/7 experience  to your customers. Get in touch with one of our specialists to further discuss how they can help your business.