There’s a high likelihood that the use of chatbots will have a massive impact in the banking industry following the willingness that major global banks have shown towards the initiative.
A chatbot is a technology that’s powered by Artificial Intelligence to facilitate a conversation between customers and businesses in form of written messages or audios.
Read more about how chatbots work…
Following the recession that happened a few years ago causing the collapse of major World’s financial players such as Lehman Brothers Bank, banks are swift to adopt technologies that can enable them to reduce losses. Already, reputable banks such as HSBC, Standard Chartered Bank, Hang Seng Bank, and Bank of America have each adopted or currently angling to incorporate the technology into their system.
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It’s still early to preempt the effects that AI technologies can have on the banking industry. Good results or bad ones, banks look set to pay the price by allowing their customers to interact with banks via the system.
Errors cannot lead to suing of the bank
If a man is to error, what of the technologies that man has invented? Chatbots are not faultless so banks are cautious enough never to take liabilities in an event an error occurs in. The errors that the banks evade liabilities include error in transactions or errors and investment executions.
Bank of America which remains the largest bank in the US based on the assets is currently conducting a trial on its chatbot to minimize flaws when the technology launches. The bank’s chatbot is called Erica which permits communication both through voice and text.
Limited personnel to maintain the bots
Being a new technology, banks still lack individuals with the expertise to run the programs effectively. Even though chatbots can communicate with a human in a human-like manner, we still need experts to ensure that the system doesn’t stall or get stuck midway in the conversation. There’s need for the banks to train or hire an individual with immense experience with the technology to ensure that customers are satisfied with the service.
Standard Chartered Bank is another major bank that’s waiting to be certified by the regulatory bodies to start granting AI services as from April. The bank’s chatbot is expected to handle more than 80 percent of the clients’ requests where conversations are done via text messages. However, Kasito’s CEO, Zor Gorelov thinks that lack of human agents to offer backup services when the system fails will be a big undoing to banks embracing the technology.
Cutting down the cost
A report that Juniper Research released anticipates that chatbots will reduce service cost by about $8 Billion each year as from 2022. This means that in future, there will be no instances of banks collapsing just because they cannot sustain the manpower that they hire.
It isn’t only the finance that AI will be downsizing, but also time. Chatbots guarantee a speedy response to any concern that a customer raises. The same research firm indicates that the fintech initiative will save at least six minutes that the contemporary call centers currently lose. Time is money so when you cut down on time and costs, excess wealth is inevitable.
Shift from phone to social media
If you want to know that many phone numbers are not in use, try calling the Whatsapp numbers you have in your contact and you’ll realize that nearly a half of them do not go through. That’s indeed a manifestation that customers are exiting ordinary phone avenue to social media. Instead of making phone calls to the banks the way we did in the past-which can only take 10 seconds, people prefer social media chats where responses are instantaneous.
It’s at the above backdrop that Hong Kong’s largest corporate bank by asset HSBC launched its chatbot known as Amy to ease conversations on social media. The bank’s head of Business banking, Daniel Chan explains that people who own smartphones spend more time sending messages through social media than they do with the phone numbers.
The critics of the idea argue that chatbots will render many people jobless at the same time lower the customers’ experience on many services given that the bots cannot empathize. Crusaders of the innovation insist that the technology enhances speed service and lowering the wage bill for businesses.
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