Finance is a fundamental part of our daily lives, and of course, banking services are essential in modern society. In recent years, technology has transformed the banking industry and the way we relate to it. Artificial Intelligence (AI) and the transformation of the Customer Experience (CX) in Banking are closely related.

Evolution of the Banking Sector

There are many changes that we have witnessed in the banking sector in recent years, among others, we can list by way of example:

  • Digital Banking, nowadays all banks have digital platforms that allow us, in self-service mode, to carry out all kinds of operations and transacctions: account opening, transfers, currency exchange, investment in stock markets…
  • Conversational Banking which, using “digital banking” platforms, has enabled banking and customers to interact in real time through text messaging, voice, mobile applications, messaging apps and websites to offer new channels of contact and unprecedented levels of service; let’s not forget that the goal of the “digital banking” is to “empower customers and banks to interact in real time through text messaging, voice, mobile applications, messaging apps and websites to offer new channels of contact and unprecedented levels of service. Let’s not forget that the objective of “Conversational Banking” is to try to reproduce the experience of the “offline” customer relationship and provide a complete and quality online experience.
  • The Open Banking which, following regulation by the European Parliament in 2015 (Payment Services Directive PSD2, Directive (EU) 2015/2366), has brought about a decisive change by promoting the development and use of innovative solutions that are integrated into the ecosystem of banking solutions thanks to the use of APIs.
  • The emergence of Neobanks and Fintechs, whose core business is fully aligned with digital and innovation, have opened the doors to a multitude of competitive and innovative services in the sector.

 

Artificial Intelligence has had a special impact on the Transformation of the Customer Experience in Banking. Virtual assistants are here to stay and facilitate multiple operations for customers.

Application of AI in Banking

The use of AI in banks is not new; investment banks, for example, have used AI and Machine Learning long before other sectors to predict behavioral patterns. Over the last decade, banking has embraced AI in a variety of ways to improve operational efficiency, customer experience and decision making.

Banks are currently applying AI to create portfolios, choose assets, perform analysis of large financial data sets, fraud detection, make predictions of economic trends and investment risks.

The opportunities for AI applications go beyond basic banking activities. Implementing AI in customer interactions, in line with strategies such as “conversational banking,” among other things, makes it possible to manage frequently asked questions and provide quick answers to customers or personalized recommendations for banking or financial products and services, improving the customer experience and customer service and extending its coverage to 24/7.

In a recent study, the McKinsey Global Institute (MGI) has estimated that, in the Banking sector, Generative AI also known as “GenAI” could have a huge impact generating an additional value of between $200 billion and $340 billion per year; all this by increasing productivity in functions such as marketing, sales and customer interactions, among other use cases. [1].

Use cases of conversational AI in Banking

If we put the focus on marketing activities and customer interaction, we can consider multiple use cases for Artificial Intelligence, but in this specific article we will focus on Conversational AI.

Conversational AI is a branch of artificial intelligence that simulates human conversations (if you want to know more about Conversational AI, you can read our article: “What is Conversational AI and how did we get here“).

The strategies of closure and reduction of physical offices of banks, due to the growing demand by customers for non-face-to-face services, have transferred a significant volume of these face-to-face interactions to the digital customer service channels that banks make available to their customers: digital banking, telephone banking…

Perhaps the most relevant use cases for the application of Conversational AI in Banking are focused on the automation of conversations through AI Conversational Assistants or intelligent banking assistants.

Banking Assistants

AI has been integrated into mobile apps and voice assistants, allowing customers to perform banking transactions, check balances and obtain current financial information immediately through voice commands.

Recommendations of personalized products and services, such as savings accounts, credit cards or investments.

Wizards for improved Customer Service, thanks to the attention of frequently asked questions and provide quick answers to customers online, improving customer service 24 hours a day.

Benefits of Conversational AIs in Banking

We can not fail to review some of the key benefits from a Customer Experience (CX) perspective, we could surely list many more, but to point out the most important ones are:

  • Extending customer service and transactional request management to channels with high demand such as WhatsApp or chats in a fully automated way.
  • Improving accessibility to services for groups with disabilities or the elderly after the disappearance of physical offices, adapting the experience to their needs and most common operations and keeping open the possibility of referring them to other services.
  • Hyper-personalization of the customer experience based on data analysis, with the possibility of personalized notifications and recommendations.
  • Service improvement and offer prospecting taking into account real customer demands.

Additionally, it is not easy to ignore the economic impact that AI could bring to the banking sector equivalent to an additional value of between 200 and 340 billion dollars per year! A not inconsiderable sum…

Challenges of AI in Banking

The integration of artificial intelligence (AI) in the banking sector, while promising, is not without significant challenges. Challenges that are not entirely different from those found in other sectors.

Protecting the privacy of financial data becomes crucial, with the need to ensure robust security measures. In addition, AI, lacking a full understanding of the human context, faces challenges in interpreting nuances and making ethical decisions, underscoring the importance of addressing these issues for effective and ethical deployment in future banking.

In conclusion, the integration of Artificial Intelligence taking place in the banking sector has marked a significant milestone, as it is redefining the customer experience. From intelligent assistants that provide instant answers to data analytics systems that personalize recommendations, AI has driven a positive revolution in customer service.

This marriage of advanced technology and financial services has not only improved operational efficiency, but has also raised customer satisfaction, setting a higher standard for the industry as a whole. Artificial intelligence is not just a tool, but a catalyst that has transformed the way customers interact with and perceive banking services, paving the way for a more agile and user-centric financial future.

Discover how MAIA can be your best ally. Experience firsthand how Artificial Intelligence is a determining factor in the transformation of the Customer Experience in Banking.

[1] The economic potential of generative AI: The next productivity frontier, McKinzey June 14, 2023