Jun 25, 2024

Is Chat-First Banking a short-term trend due to pandemic, or is it here to stay?

Customers want to be able to bank on their own terms-- when they want, where they want, and with whom they want. Chat banking is a cost-effective way for banks to provide customer service

Chat First Banking, exploring the profound impact of AI and Chatbots in the era of chat-first banking.

When you think of a bank, what's the first thing that comes to your mind? If you're like most people, it's probably not "fun." Banks are associated with boring things like paperwork and fees--not exactly a recipe of excitement.

However, the future of banking is changing dramatically thanks to an influx of technology companies entering the financial industry. These companies are using chat bots to perform a variety of banking tasks, such as checking balances, transferring money, paying bills, and reporting problems. The number of digital banking users is expected to reach 3.6 billion by 2024.

These new technologies become more popular among consumers, banks must adapt or risk losing out on valuable business opportunities in favor of their competitors who have already adopted them!

In this article, we will look at different common questions asked regarding chat banking.

So what is chat banking?

A recent development in banking is chat banking. Customers can conduct financial transactions or ask queries through chat interface like Facebook Messenger, Whats App, Telegram, or their own app without having to go to your bank or make a phone call. It is convenient to use and saves a lot of time.

1. Why banking customers are ditching the branch.

Customers want to be able to bank on their own terms-- when they want, where they want, and with whom they want. That's why mobile banking is so popular, it gives customers the freedom to assist themselves while being able to check their account balances or pay bills from anywhere at any time without having to leave home or work.

Chat banking is also more secure than some people might think with end-to-end encryption to protect customer data. This means that only the customer and the bank can see the messages that are exchanged.

On the other hand, Branches are also expensive and inefficient for banks in today's economy: Banks need lots of employees working long hours doing repetitive work just so that one person can help another customer at a time; these costs add up quickly! Additionally, branches aren't always convenient for Gen Z who may prefer doing things on their own rather than need to travel to a physical location for long queues.

2. So what does this mean for consumers and developers?

Chat-first banking is a trend that's here to stay. It will continue to grow in popularity and become the primary method of communication between banks and their customers.

Gartner Predicts Chatbots Will Become a Primary Customer Service Channel Within 5 Years. Banks can use chatbots to provide more efficient customer service, as well as offer new features that weren't possible before. For example, you might be able to track your spending habits with a simple message sent from your bank account bot--no need for a phone call or even an email !

Developers who want their products integrated into this new world should take note: there are many ways you can benefit from integrating with smart AI chat bots today.

3. Is the chat bot used only to solve queries?

Chat banking is also a cost-effective way for banks to provide customer service. Chatbots can handle many customer queries without the need for human intervention, which can save banks money on labor costs. According to Juniper Research, banks will save 826 million hours through chatbot interactions in 2023. The same research firm also predicts that bots can save banks 4 minutes per inquiry, or a cost savings of $0.50-0.70 per inquiry.

Bank Cost Savings via Chatbots to Reach $7.3 Billion by 2023. While chat-first banking may be a trend at the moment, it's also one that can be used for more than just customer service and product information. Banks are using chat to provide new offerings such as virtual credit cards, identity verification and small business lending.

These innovations show how banks are leveraging the technology for more than just customer service -- they're using it to create entirely new experiences that don't exist in other channels. This is a big deal because it means banks will continue to innovate with their customers' needs in mind instead of simply relying on what has worked before (like branch locations).

4. Will adopting AI cause a drastic change in my company?

The future of banking will be different than what we're used to, but it won't be a drastic change as many people think. The chat-first banks of the future will still have physical branches and ATMs, and they'll still offer traditional banking services like loans and mortgages. They'll also offer new options like mobile check deposits and bill pay--but these services won't be exclusive to one type of bank or another; instead, they'll become standard across all types of financial institutions.

The most important thing for consumers to understand about these changes is that convenience matters more than ever before when choosing where to keep their money. Your money works best when it's accessible anywhere at any time--and if you don't have access via your preferred method (online or mobile), then your money won't work at all !

5. Chat-First Banking: Pandemic Trend or Long-Term Change?

Chat-first banking is a pandemic trend, but it's not the only one. The future of banking is all about digitization, with chat bots and artificial intelligence (AI) playing a major role in how we interact with our financial institutions. And for good reason: AI is already making waves in the fin tech space by helping banks save time and money on tasks that humans used to do manually, like answering customer questions or creating personalized recommendations based on their spending habits.

It's clear that this tech will be part of the future of banking--but what does that mean for customers? Will they actually benefit from these changes? Or will they simply become more frustrated by them as they try to keep up with technology at work?

According to our research, around 85% people prefer online banking. It does take a bit of effort to learn it but once you do, you save a lot of energy in future. By making it simple to obtain their account information online, customers may conduct business when travelling for work, at odd hours, or outside of their bank's service area. It is definitely not just a trend but the future of banking.

The future of banking is in the hands of smart bots

Banks are adopting chat bots to ease pain points that exist in traditional mobile banking apps. For example, many banks have struggled to build a mobile app that can provide accurate information about a user's balance and transactions. This problem is compounded by the fact that most people don't want to log into their bank accounts on their phones or tablets--they prefer to do so from desktop computers.

Chat bots provide an opportunity for banks to solve these problems because they allow customers access quick answers on the website itself while they're not using the app at all. According to Userlike, 68% of users enjoy the convenience that comes with using chatbots, in particular how quickly they receive a response.

These virtual assistants can help to reduce friction when making purchases or paying bills online by providing step-by-step instructions through audio prompts instead of requiring users read through lengthy text messages or emails before completing tasks like depositing checks into their accounts or transferring funds between accounts at other institutions (or even within their own institution).

Implementing chat-first banking comes with its own set of challenges, despite the many advantages it offers

  • Security: It is important to ensure that chat banking is secure and that customers' personal information is protected.
  • Training: Banks need to train their staff on how to use chat banking effectively and to provide customers with a good experience.
  • Integration: Banks need to integrate chat banking with their existing banking systems alongside other channels like mobile apps, web, kiosk, to ensure that it is easy for customers to use.
  • User Experience: Creating a seamless and user-friendly chat banking experience with required advanced natural language processing and AI capabilities to ensure that chatbots understand and respond accurately to customer inquiries.
  • Scalability: As the customer base grows and chat banking gains popularity, banks must ensure that their systems can handle increased demand without sacrificing performance.
  • Training and Maintenance: Chatbots require continuous training and maintenance to stay up-to-date and relevant. This involves monitoring conversations, identifying areas for improvement, and updating the chatbot's knowledge base.
  • Customer Expectations: Meeting customer expectations for instant responses, accuracy, and personalization can be demanding. Customers may have high expectations for chat banking services based on their experiences with other messaging apps.
  • Language and Cultural Differences: Serving a diverse customer base with varying languages and cultural nuances can be challenging. Chatbots need to be able to handle multiple languages and adapt to different cultural contexts.

Decision pointsOpen-Source LLMClose-Source LLM
AccessibilityThe code behind the LLM is freely available for anyone to inspect, modify, and use. This fosters collaboration and innovation.The underlying code is proprietary and not accessible to the public. Users rely on the terms and conditions set by the developer.
CustomizationLLMs can be customized and adapted for specific tasks or applications. Developers can fine-tune the models and experiment with new techniques.Customization options are typically limited. Users might have some options to adjust parameters, but are restricted to the functionalities provided by the developer.
Community & DevelopmentBenefit from a thriving community of developers and researchers who contribute to improvements, bug fixes, and feature enhancements.Development is controlled by the owning company, with limited external contributions.
SupportSupport may come from the community, but users may need to rely on in-house expertise for troubleshooting and maintenance.Typically comes with dedicated support from the developer, offering professional assistance and guidance.
CostGenerally free to use, with minimal costs for running the model on your own infrastructure, & may require investment in technical expertise for customization and maintenance.May involve licensing fees, pay-per-use models or require cloud-based access with associated costs.
Transparency & BiasGreater transparency as the training data and methods are open to scrutiny, potentially reducing bias.Limited transparency makes it harder to identify and address potential biases within the model.
IPCode and potentially training data are publicly accessible, can be used as a foundation for building new models.Code and training data are considered trade secrets, no external contributions
SecurityTraining data might be accessible, raising privacy concerns if it contains sensitive information & Security relies on the communityThe codebase is not publicly accessible, control over the training data and stricter privacy measures & Security depends on the vendor's commitment
ScalabilityUsers might need to invest in their own infrastructure to train and run very large models & require leveraging community experts resourcesCompanies often have access to significant resources for training and scaling their models and can be offered as cloud-based services
Deployment & Integration ComplexityOffers greater flexibility for customization and integration into specific workflows but often requires more technical knowledgeTypically designed for ease of deployment and integration with minimal technical setup. Customization options might be limited to functionalities offered by the vendor.
10 ponits you need to evaluate for your Enterprise Usecases

To Wrap Up

While chat-first banking has the potential to improve customer service and operational efficiency for banks, addressing these challenges is essential for a successful implementation and adoption of this technology. It requires a strategic approach and ongoing investment in technology and customer experience.

By partnering with Fluid AI, you can tackle these challenges and considerations, crafting a chat-first banking solution that ensures an optimal customer experience while simplifying support for your employees and staff. This collaboration empowers your organization to maintain its competitive edge and meet the ever-changing demands of customers in the digital era

Reach out to us to get your own smart chatbot powered by GPT and give your customers the best they can ever get, Because you deserve to be the best !

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