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Fintech Chatbots: Purposes and Key Opportunities for Businesses

8 Mins read

While lots of technologies have positively impacted the financial services industry, it is clearly AI that has truly revolutionized financial services.

Having taken the world by storm, the AI revolution is definitely far from slowing down with 2024 already being expected as the next AI’s “leap forward” year.

Being a priority tech for investment, the global market for AI is projected to surpass $ 521.3 billion by 2028, with a CAGR of 35% from 2023 to 2028.  

As financial companies are in the process of exploring how they can leverage AI to the greatest advantage given their specific use cases and needs, the most obvious area to be impacted by the new AI wave is – chatbots.

Indeed, the latest Zendesk report highlights that a solid 64% of business leaders are amplifying their investments in evolving chatbots. 

In this article, we’ll explore the significance of AI chatbot applications across finance, overview top use cases, see how fintech chatbots benefit, and try to gauge what potentially could lie ahead for the chatbots in finance.

The Role of Fintech Chatbots in the Financial Services Industry

Today, chatbots are among key tech trends and stand as a crucial element of digital transformation. 

These helpers can facilitate tasks and troubleshoot issues, provide accurate information at the speed of need, and assist users in maintaining their financial health – in a cost-effective way for the business and with round-the-clock availability for the customers.

However, not all chatbots work the same way. Executives need to look for conversational AI and deploy more “evolved” chatbots.

Often referred to as virtual agents or intelligent virtual assistants, these AI-driven chatbots use ML and a branch of AI called natural language processing (NLP) along with its subsets NLU and NLG, which make such a chatbot a valuable tool for banks and financial organizations.

When deployed effectively, modern AI chatbots can help financial organizations boost customer satisfaction, lower retention rates, enhance operational efficiencies, and cut costs in a smart way. 

Fintech chatbots to elevate customer service

As for 78% of banking customers, the first touchpoint is digital, and the number of fintech apps only continues to grow, financial organizations will seek to level up their digital service. Indeed, amid a wide range of options available to consumers now, customer service is a key differentiator in financial services. Data from the Zendesk 2022 report shows that 77% of financial service leaders agree that customer service is a critical business priority.

With a smart AI chatbot such a strategic objective becomes more attainable, as over 62% of consumers turn to AI to enhance user experience.

Fintech chatbots to drive operational efficiencies 

Due to the prevailing labor shortages and tight labor market, financial organizations are challenged by agent staff shortages – eight in ten banks are struggling to recruit new staff members –  and face the need to reduce costs, they will increasingly seek ways to sustain operational efficiency. Besides, executives need to elevate employee experience to increase talent retention, and improve staff productivity and overall business performance.

And when it comes to this, modern AI chatbots can be of help as well. In particular, Generative AI is highlighted by McKinsey as the next productivity frontier.

Follow us in the article to learn the most common use cases of chatbots in the financial industry.

Exploring fintech chatbot use cases

Smart chatbots stand as a powerful tool for banks and financial organizations across the sector, as they can cater to a multitude of use cases.

Here’s a quick overview of the most common applications of fintech chatbots.

24/7 Customer support

Prompt and efficient support is of paramount importance, especially when it comes to finances, because, as we know – “time is money.”

Fintech chatbots take care of customer inquiries and concerns in a cost-effective way for a business and with round-the-clock availability for customers.

They can effectively address FAQs, troubleshoot basic issues, and provide accurate information and helpful answers to user queries – all while being context-aware, consistent, and omnichannel.

Onboarding processes

Financial chatbots can facilitate the onboarding process for both new customers and recently hired employees – saving both time and resources across the organization.

New clients can experience a seamless onboarding journey with an AI chatbot efficiently collecting information, verifying identities, providing necessary step-by-step guidance, and ensuring a positive start.

Employees, on the other hand, can get a comprehensive immersion into a company’s policies and regulations, work processes, and essential tools to integrate into their roles more smoothly and efficiently.

Streamlining internal operations

Fintech firms can also utilize AI chatbots to answer employees’ questions and help them access necessary information at the speed of need, boosting staff productivity, reducing cross-departmental dependencies, and accelerating decision-making processes – particularly crucial in time-sensitive situations common in the financial industry.

Account management

Given the fast-paced environment we live in, money management may often turn into a daunting task. Smart chatbots can come in handy and provide a broad range of convenient self-service options to help users stay on top of their finances.

For example, customers can instantly check their balances and transaction history, monitor essential market information, be alerted about unusual account activity, get timely bill reminders, and even perform transactions through sleek conversational interactions.

Personal finance management

Finance chatbots have proven to be a valuable tool for personal financial management. By analyzing customers’ behavior and historical data, these chatbots can uncover insights and make useful recommendations, helping customers improve their financial well-being.

By leveraging machine learning algorithms, they continuously refine their recommendations based on users’ financial habits and goals, fostering a more personalized and effective financial management experience.

Be it budgeting tips, investment advice, or a suitable financial product that matches customer’s goals and preferences – an AI chatbot can handle it all.

6 Reasons to Launch Fintech Chatbot

Offering efficient human-like support 24/7

Today, customers increasingly go for digital-first interactions. Due to advances at every corner, customers expect digital service to be convenient and closely mirror the in-person experience of engaging with a bank manager. 

Prompt issue resolution 24/7

When any finance-related issue arises, all customers want from banks is their dedication to lightning-fast and efficient assistance – be it day or night.

A whopping 90% of customers say that it’s absolutely critical to have issues resolved in a timely fashion. 

With smart AI chatbots on board, financial companies become well-equipped to respond to customer needs and solve their issues with care any time of the day.

Human-like comprehension 

Traditional rule-based chatbots lack conversational skills and often fail to provide helpful responses to the users, as they typically deal with basic information.

Modern AI chatbots – the ones equipped with ML, NLP, NLU, and NLG – are way different and can immensely contribute to the positive customer experience.

They can recognize human intent, comprehend the emotions behind the query, and provide an informative response with relevant comments and insights.

Not to mention their capabilities to retain context and build seamless interactions.

Notably, 67% of business leaders believe chatbots can forge a stronger emotional connection with customers.

Making Financial management Seamless and Stress-free 

Given the rapid nature of our globalized world, today’s savvy customers expect to receive convenient real-time service and seamless digital banking experience across channels of their choice.

  • Omnichannel experience matters: According to recent data, over 75% of customers use multiple channels in their ongoing experience.
  • Consistency is crucial: 73% of customers are likely to switch a company if the level of service is inconsistent.
  • Convenient self-service options are vital: a staggering 69% of customers say it’s critical to have self-service options at their fingertips.

Fintech companies can leverage intelligent chatbots to provide convenient self-service options and a consistent omnichannel experience to their customers.

Such a move empowers clients to interact with financial organizations more straightforwardly and manage the financial side of their lives much easier – ultimately driving satisfaction and boosting engagement rates.

Building Personalized Interactions with Customers 

Customers crave to be treated individually and expect great attention and care when it comes to their financial health. According to Deloitte, over 50% of bank customers find personalized services to be a critical factor shaping their trust and loyalty in financial providers.

Modern AI chatbots focus not only on resolving issues in real-time but also are smart enough to analyze and offer personalized suggestions and guide the user towards the best possible option since they are pre-trained with information on customers’ financial history and behavior patterns.

Recent figures from Salesforce and McKinsey reports indicate that a staggering 73% of customers expect personalized service, while 76% get frustrated when their unique needs are not met.

Augmenting Marketing Strategy in a Smart Way

With AI tech on board, financial service providers are better equipped to understand their customers, and cater their unique needs with suitable offers. 

Notably, a recent study by Deloitte indicates that only 35% of traditional banks offer personalization that aligns with  customers’ needs at the right time and place.

Fintech chatbots can thoroughly monitor customer behavior and, based on such analytics, can improve the targeting of financial products and promote relevant offerings to customers when it’s right. 

Such a move will not only bring value to users and boost engagement, but will also translate to increased sales.

For example, by leveraging AI powers, some financial institutions were able to proactively anticipate customers’ needs and cater to them with personalized offers – all of which helped them boost their sales by almost 30%.

Supercharging Operational Efficiency 

Implementation of AI is poised to significantly enhance employee productivity and drive tangible efficiencies for businesses.

On the one hand, it is common knowledge that chatbots can significantly reduce the pressure put on customer support teams, allowing them to focus on more value-added tasks that require a human touch and let AI take care of the rest. 

Given that AI-powered agents can handle up to 80% of commonly asked questions, deploying an intelligent chatbot becomes a game-changer.

On the other hand, AI chatbots can also act as a member of the team, supporting employees directly by providing real-time assistance.

Employees can consult a chatbot just like their human teammates and instantly access relevant information to make faster, more informed decisions. In turn, a positive employee experience will lead to better well-being, increased engagement, and better business results – up to a 50% increase in revenue, according to the research.

Besides, AI can also facilitate onboarding and streamline manual processes across departments, saving both time and resources for financial organizations.

Driving Cost-Savings through Operational Enhancement

A whopping 44% of businesses that embrace AI cite reducing operational costs as a key reason for adoption. 

As customer bases grow and volumes increase, finance companies can seamlessly scale AI chatbots and enlarge their support capacity – without hiring additional staff. 

And while AI chatbots greatly boost employee efficiency, they also lead to better business outcomes and cost-savings. In total, they are projected to amount to $80 billion by 2026, with one in 10 agent interactions being automated by that time.

Isn’t that mind-blowing how much money can be saved, hence redirected to turbocharge other organizational areas? Indeed it is.

Develop a fintech AI chatbot with Kindgeek 

Kindgeek is a one-stop-shop fintech development company that illuminates how finance companies can reach their full potential with digital solutions. From product discovery services to deployment and beyond, we guide through the whole process of developing fintech products.

We match innovative technologies, including AI, with specific business challenges to help fintech companies drive efficiency, cost-savings, and competitive edge amidst the dynamic financial market landscape.

Additionally, our experts have extensively worked with GenAI and LLMs, particularly with OpenAI GPT, and developed a comprehensive suite of AI assistant services to help you leverage the latest advancements in AI.

The Future of AI Chatbots in the Fintech Industry

With everything moving towards automation, chatbots will be an indispensable element of digital transformation across the financial services industry.

Chatbots have come a long way. They already have a vast span of capabilities, and now, due to the rapid advances in AI, they will only get better with time. And mainstream, given the rapid developments in AI and the rising bar in customer expectations.

As more and more customers prefer digital banking, it is evident that the use of intelligent and conversational chatbots will only continue to grow.  Indeed, Gartner predicts that chatbots will become a chief customer service channel for a quarter of organizations by 2027. 

Thus, in the future, we might expect to see a decrease in the number of physical branches as digital banking improves and advanced chatbots become the primary way customers interact with their banks. 

Well, such a scenario is not too far-fetched, considering the advancements in AI that have already been made.

Notably, recent reports indicate that over 55% of companies are either in piloting or production mode with Generative AI – a skyrocketing increase from just 19% in March 2023. 

Hence, it’s more than high time for other businesses to seek their own way to tech unless they want to trail behind very soon.

As McKinsey puts it, “The era of generative AI is just beginning.” And we are standing at the dawn of it.

What is the role of AI chatbots in fintech nowadays?

Today, AI chatbots stand as a vital element of every customer-oriented business, in particular banks and financial organizations. Basically, they help achieve two strategic goals of every financial business – enhance customer experience and reach a better level of operational efficiency.

Why is it essential to deploy modern AI chatbots for fintech companies?

The financial industry is very dynamic, hence a competitive one. Banks need to be alert and take action to improve their customer-facing touchpoints. Recent stats speak for themselves: one poor chatbot experience drives away 30% of customers, while 61% are more likely to build loyalty after a positive experience.

What are the most common examples of chatbot use cases?

While fintech chatbots can be tailored to cover various use cases, the most common ones include customer support, account management, personal finance management, onboarding processes, and automation of internal operations.

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