Conversational AI in Banking: How Indian FIs are Talking to Customers

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Chatbots and other AI initiatives in banks can lead to faster regulatory compliance, and reduce costs involved in compliance as well

By Ram Menon

Lakshmi, Disha and IRIS. No, we are not talking about baby names; we are talking about chatbots. Indian banks and other financial institutions (FIs) have not just taken baby steps to automate customer support processes but have already begun to see the benefits of conversational artificial intelligence (AI)-driven solutions.

According to an Accenture survey of 800 banking executives across 25 countries, “About 79 per cent of bankers believe that within the next two years, AI will work next to humans in their organisations as a co-worker, collaborator and trusted advisor.”

And chatbots are one such visible form of AI being launched in Indian banks.

Lakshmi, innocuous as it sounds, is in reality a bot rolled out by City Union Bank to help customers find answers to their queries in real time. These queries cover a range of simple requests including questions like ‘which is the nearest ATM’ or ‘how to reset password for online banking’. Lakshmi has today grown into a popular channel and is accessible on the bank’s web and Facebook channels. From the time the bank deployed Lakshmi, its operating expenses have dropped by nearly 30 per cent. What’s more, the bot handles over 10,000 customer queries every week with an accuracy of over 92 per cent.

Aditya Birla Sun Life Insurance rolled out a chatbot called Disha to enhance customer experience and to manage their increasing business flow. This bot again answers commonly asked queries on insurance. It also helps customers get premium quotes and resolve any issues they might have. The company typically receives a huge number of policy requests, especially as the financial year comes to an end. The AI-based chatbot successfully helps the bank handle high volumes of queries effectively during such high traffic periods.

IRIS, rolled out by IndiaFirst Life Insurance, offers a live chat experience. Lowered dependence on agents and contact centres allows the company’s sales force to function more smartly and efficiently. Customer experience is another key responsibility of the IRIS platform.

Chatbots and superior CX

These three use cases show how conversational AI platforms are excellent for enhanced customer experience. In the era of the customer, offering a superior customer experience is the key brand differentiator. Chatbots ensure that customers effortlessly access information, therefore leading to brand loyalty and higher retention rates. What’s more, an increasing number of consumers are comfortable with the idea of AI. A Capgemini Research Institute report on AI shows that 73 per cent of its respondents were aware of having AI-enabled interactions, including chatbots for customer service, facial recognition for consumer identification, etc. While a Salesforce report says that 71 per cent of all customers it surveyed in India say AI is already or actively transforming their expectations of companies.

By using chatbots, customer waiting times are lowered, leading to lesser or zero frustration. In the case of Disha, the chatbot deployed by Birla Sun Life, response time to complete quote creation and application process has dropped from a 24-72 hours window to a mere 5-15 minutes window. This automatically means satisfied and happy customers. For the bank, it leads to customer retention.

Another benefit for customers is that AI delivers a personalised experience, thanks to the power of big data, analytics and machine learning (ML).

Conversational AI brings benefits for banks and FIs

By eliminating repetitive and time-consuming tasks, agents can improve their productivity and focus on tasks that need human attention and insights. Also, AI has a direct benefit in terms of lowered costs for banks/FIs. This benefit can be passed on to customers as a result. A 2018 Juniper Research report says that bank savings via use of chatbots will touch US$ 7.3 billion, come 2023. The time saved for banks will touch 862 million hours by 2023. This is equal to almost half a million working years, the report adds.

Chatbots help customers and employees make better decisions – thanks to bots that can crunch more numbers than a human agent. They can detect and alert customers/employees of fraudulent activities in real-time. Customers can verify if there’s been any suspicious activity.

Thanks to chatbots, banks and FIs can also send push notifications about new products/services. Conversational AI-enabled bots can now play the role of sales personnel who send out information, thereby improving not just CX but also efficiency among the sales staff.

The chatbot learns customer behaviour and preferences and is able to give financial institutions a wealth of actionable insights. FIs can analyse patterns of a specific customer’s account information and patterns of spending to dole out a tailor-made financial plan/scheme.

As the use of Disha, IRIS and Lakshmi show, conversational AI streamlines back-office operations apart from customer support. This, in turn, boosts operational excellence.

Chatbots also ensure better lending risk management, as a Capgemini report explains. The report says that AI can do so by “scanning and evaluating a borrower’s data from social media and other current sources, providing a more holistic view of the borrower’s capability to pay back loans on time.”

Also, chatbots and other AI initiatives in banks can lead to faster regulatory compliance, and reduce costs involved in compliance as well. A Capgemini Research Institute survey shows that compliance costs can come down by over 10 per cent, thanks to AI initiatives.

Summing up, the future is already here, and chatbots will only get better as more banks and FIs start to use them. Chatbots will be the bridge that banks and customers will come to cherish.

Ram Menon is the Founder and CEO of Avaamo, a deep-learning software company.

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