The article was updated on April 27, 2022
In 2022, chatbots are no longer an innovation but rather a must-have for businesses that count on interaction with customers, including financial institutions. AI-driven chatbots can simulate human conversations, solve clients’ issues in a matter of seconds, and undertake routine tasks, allowing human staff to carry out more complicated and important matters.
By 2024, online and mobile banking will most likely serve over 2.5 billion active users. Smart financial assistants can transform this huge customer-related aspect of your business. It makes fintech chatbots not only a powerful tool but an essential part of your team. Besides that, it’s a promising market branch that is expected to reach almost $7 billion by 2030.
Let’s take a look at how chatbots are driving fintech in 2022, the benefits of chatbots in banking and other fintech niches, and how to create a fintech chatbot for an effective financial business.
We all know how great chatbots work in e-commerce, travel, or healthcare. Generally, smart virtual assistants ensure great customer engagement and cost-efficient client-oriented services.
But what exactly can AI chatbots do for a finance business?
Automate routine tasks
One of the primary goals of AI-driven chatbots is to provide human-like user support. It means that financial bots can communicate with your clients, introduce your service to them, answer their questions, receive complaints, and give personalized advice.
While machines can take over all these monotonous tasks, they let your human employees work on substantial issues and general service improvement.
Bring customer experience to a new level
Bots don’t get tired or irritated, they don’t need to take breaks or sleep. When dealing with payments, investments, or serious money concerns, finance assistants play a vital role.
Polite and supportive any time, a fintech chatbot will respond to a client’s query in a moment and keep replies brief and to the point. Not to mention that round-the-clock availability will expand your audience to other time zones.
Strengthen security aspects
In 2022, a carefully designed chatbot is a more secure communication channel than a phone call or an email. Diverse authentication systems, including fingerprint or face recognition, provide a high user data protection level.
Encrypted chats also ensure there will be no accidental data leak. AI-driven chatbots can also use complex algorithms to timely detect and block shady individuals and prevent frauds.
Make financial procedures stress-free
Dealing with financial operations may sometimes be nerve racking, no matter the scale. Chatbots can turn this user pain point into a seamless process.
It’s not only about managing transactions and complicated procedures right from your couch; your clients will highly appreciate your automated assistants’ clear instructions and concise explanations.
Augment your marketing strategy
Banks and other financial institutions rely in large part on marketing methods when trying to broaden and strengthen client engagement, product promotion, and services offered.
AI technology allows finance chatbots to analyze user behavior and make no-lose offers. If you put enough effort into this aspect, your bots will bring value to the clients by giving them useful insights and promoting the right services unobtrusively.
When developed wisely, AI in fintech can enhance the productivity of your team, and even surpass human staff in some aspects. In any finance-related issue, customers seek conciseness, precision, and responsiveness. Financial chatbots exceed their expectations in full.
How can chatbots be used in fintech? The range of tasks they fulfill is quite diverse, and bots can become a harmonious part of the customer support, security, or even marketing team.
We’ve prepared a quick overview of the most common implementation practices, backed up with use cases for chatbots in banking and other financial branches.
24/7 customer support
The phrase “Time is money” obtains literal meaning when it comes to managing your finances. Clients require instant reaction, no matter the time of the day. People choose to involve chatbots in banking primarily because of their ability to provide such services without human assistance.
With that said, AI-driven chatbots save financial and staff resources and also support the healthy lifestyle of a company’s employees.
Example – Basically, the overwhelming majority of chatbots in any industry have the day-and-night availability function. Among chatbots in banking, TD Clari is a typical representative of a smart financial assistant who can resolve the most common queries around the clock, with no pauses or days-off.
Chatbots in finance aim to simplify core financial operations, particularly payments. Money transfers may be complicated and stressful if the platform is not well thought-out.
However, bots can guide users through the procedure, and if you link PayPal or any other payment system account, it will make transfers straightforward and sure-fire.
Example – One of the largest Hong Kong banks, Hang Seng Bank, simplifies payment services with the help of the Haro chatbot. The digital assistant guarantees smooth and fast financial operations 24/7, from currency exchange to different kinds of money transfers.
Money management is a complex process that can turn into chaos if you don’t have a systematic approach to it. Chatbots in finance and accounting offer tools that help track and analyze various aspects of your financial life, from income and expenses history to bill payment plans.
Example – Users of the Bank of America app are lucky to have Erica, their AI assistant. The chatbot can perform various tasks to help its users keep their finances under control.
Erica shows balances and past transactions across all bank accounts, provides scheduled bill pay reminders, monitors monthly spendings weekly, provides alerts when duplicate charges are detected, etc.
Financial bots can become an actionable tool for both experienced investors and those who’re taking their first steps in the field. Smart financial assistants advise users in creating portfolios, choosing the right methods, and offering efficient investment solutions.
Example – MyEva was designed as an intelligent chatbot that helps clients reach a state of financial well-being. It can evaluate its user’s money situation and guide customers to their financial goals. Besides spendings management and savings buildup, the chatbot offers investment assistance.
Automated fraud detection
Fraud causes great harm to the bank’s clients and their data, and undermines the reputation of the financial institution. A great part of scam cases happen due to human errors, and it becomes increasingly hard to keep an eye on transaction security manually.
On top of that, fraudulent methods become more and more sophisticated with every passing year. That’s why chatbots in the financial industry also work on scam warning and prevention.
Example – Eno, the Capital One banking chatbot, was designed with a huge emphasis on card protection. The bot identifies suspicious transactions and informs its users about them.
Among the range of other security tricks, Eno knows how to protect user data from online shopping fraud by creating virtual card numbers for each merchant.
A fintech chatbot can complete your marketing strategy by becoming an active promoter. It monitors the behavior and activity of each customer faster and more efficiently than human employees. Based on these analytics, the bot uses a tailored approach to promote personalized offers, thus boosting client engagement and generating more income for the company.
Example – Ally is a digital finance service company and has its own chatbot which can be contacted via text or voice. Among typical financial chatbot functions, the Ally bot has the talent to provide bank clients with useful tips. It analyzes a user’s transactions and activity and offers relevant advice and help based on the results of analysis.
Insurance & loans
Designing an effective finance bot solves the problem of burdening paperwork and long-running verification procedures, like during insurance or loan applications. The same process can and should be undergone faster and just as safe.
With a chatbot, your client can get a loan or solve an insurance issue by answering a couple of questions and sending the required documents online.
Example – Lemonade is an insurance company that has developed a chatbot that embodies all the benefits of using AI technology in handling insurance claims. It can process claims in a matter of seconds, and on your part, you need just to respond to several questions in the app.
The diversity of chatbot abilities allows you to design a smart assistant that fits perfectly into your business concept. Read on to learn the basics of fintech chatbot development.
1. Define the chatbot’s purpose
The aim of your smart chatbot determines its tone, core functionality, and even design. You can define the purpose by taking a closer look at your company: Which services does it deliver? What should be explained? What is the financial education level of my audience? What concerns may they face? Use this image as a guiding sketch for your ideal chatbot.
2. Choose a proper platform
Do you want to see your bot as a website add-on or a standalone mobile app? Or maybe you’d like to use Facebook Messenger, Instagram, WhatsApp, Telegram, or any other social media?
Use the knowledge about your target client to choose the right platform. For instance, the younger generation feels comfortable using their social media accounts, while older people may not have them at all.
3. Provide a human-like experience
Modern AI-based chatbots are barely distinguishable from real “human” assistants with their natural and simple language. They can go even further and outperform human communication skills. Chatbots in fintech should respond not only in a friendly but also extremely concise way so that clients have no questions left after the session.
4. Test and improve your chatbot
Just like any other project, your chatbot should prove its viability in a test. Moreover, strive to make it work flawlessly and assess the bot from the users’ perspective. You can fix malfunctions manually and also leverage machine learning potential to make your chatbot evolve autonomously.
5. Prioritize security
What are the best chatbots for banks? The ones that give no chance for malicious users to crack the system and steal your clients’ money or sensitive data. Make protection a priority by adding several security levels from advanced authentication methods to bank-level encryption.
6. Gather user feedback and work further
There is always a scope for improvement, and the best way to find it is to ask your users. Encourage them to rate the bot’s work in a chat, through an email, or with any other method.
Don’t be afraid of negative feedback, just take it into account and go on to provide a first-rate user experience.
Fintech and chatbots are not a surprising combination anymore. It’s a fantastically productive tandem that can revolutionize your company in many facets. Your chatbot can become your single and best client manager, faultless financial consultant, initial digital security guard, or tactical marketing player.
Whatever role you entrust your chatbot, a qualified virtual assistant will satisfy your clients and go beyond their expectations. If you want to build a finance chatbot app, finding a reliable and experienced technology provider is a must.
Having worked with some of the leading financial companies, including Western Union, we at Eastern Peak have the relevant experience and required skills to help you implement your ideas. Contact us now for a free consultation.
Frequently Asked Questions
How are chatbots used in finance?
Finance chatbots can undertake various duties depending on the niche of your financial institution or business. AI-powered bots can fulfill routine customer support tasks, mediate financial operations, provide personalized finance consultations, and efficiently promote your products and services.
What are the benefits of chatbots in banking?
Thoughtfully implemented AI in banking can improve the performance of your institution and partially replace human staff in several aspects, from routine customer support to marketing and promotion. Chatbots help bank clients solve their finance-related issues fast and securely.
How many banks use chatbots?
In 2021, the Cornerstone Advisors research revealed significant growth of chatbots in the banking industry. The percentage of mid-size financial institutions implementing chatbots has grown from 4% to 13% in a year. It also predicted that roughly 1 in 3 banks and credit unions would decide to get a chatbot in 2021.