Banking Article, Banking Finance 2022, Banking Finance August 2022

ROLE OF CHATBOT AS A BANKING TOOL

With consumer expectation increasing, the use of artificial intelligence, machine learning and chat bots in banking is also increasing. Banks and credit unions worldwide are testing new application and deploying new solution to improve overall digital customer experience.

In order to achieve operational efficiencies, reduction in cost of operations and better financial control, banks in India are adopting the latest technologies. After the adoption of central banking system (core banking), Indian banks are heading towards implementation of emerging technologies like big data, analytics, machine learning, artificial intelligence (AI)

Artificial intelligence (AI) is the simulation of human intelligence processes by machines, especially computer systems. Specific applications of AI include expert systems, natural language processing (NLP), speech recognition and machine vision and various other facets

AI programming focuses on three cognitive skills: learning, reasoning and self-correction.

Learning Processes This aspect of AI programming focuses on acquiring data and creating rules for how to turn the data into actionable information. The rules, which are called algorithms, provide computing devices with step-by-step instructions for how to complete a specific task.

Reasoning ProcessesThis aspect of AI programming focuses on choosing the right algorithm to reach a desired outcome.

Self-correction processes This aspect of AI programming is designed to continually fine-tune algorithms and ensure they provide the most accurate results possible.

 CHATBOT

Gone are those days where people have to stand in Banks for availing basic services. Artificial intelligence is dramatically changing the world. It is leading to better experience and assistance to customer .As a result marketers understand the importance of those applications which help in conversing with customers and help in providing better assistance.

Even now in the time of covid crisis, chat bots are playing broader and wider role in providing banking assistance to people for financial as well as non financial transactions.

Chatbots have begun to mark their presence in Indian banking sector .Kotak Mahindra bank is first to launch voice chatbot “Keya”. HDFC Bank EVA’s (Electronic virtual assistance) is largest AI powered chatbot which has already answered 5 million queries with 85% accuracy. Chatbots can analyse and understand not only the content but also the context of customer’s question.

Chatbots & Virtual Assistant can be embedded and used through any major messaging applications. Chatbots enable personalized services, reduction in waiting time for users, uninterrupted customer support, and a feedback channel to a large number of customers, and guaranteeing consumer satisfaction.

Chatbots have already begun to make their mark in Indian banking industry. Chatbots nowadays combines benefits of virtual and human assistance and provide a differentiated customer experience.

Chabot is an artificial intelligence (AI) software that can simulate a conversation or chat with a human user in natural language through messaging application (text chats) or voice commands or may be both, which may be through Website, Social media platform, or mobile apps. Techno savvy customers prefer self-service and they want quick and easy ways to get their queries responded. Chatbot conduct conversation to respond queries and deliver meaningful offer and make everyday banking easier, faster and convenient.

Some of the salient features of chatbot are that they can handle Omni-platform concurrent queries, humanistic approach, predictive in nature, they conduct short and simple interaction with easy text driven conversation and also having simple user interface. They are at customer service 24*7*365 i.e. all the time.

The history of chatbot started with “Elisa”, first ever chatbot started in 1966. It was a very basic bot providing some basic information related to entertainment, sports and price regulation of stock market as well. With the development of smart phones and the applications these chatbot have turned all the more smart .With AI progression’s and voice recognition the application of chatbot is increasing.

Banking Chat bots

Banking chatbot is an AI application that perceives and executes the banking transactions of customers.  In banking, chatbot provide opportunities to automate the relationship between the consumer and the bank. Banking has been entering a new, conversational banking era after ATMs and then telephone banking, online banking and mobile banking since the past years.  Conversational banking includes both Interactive Voice Response (IVR) systems and chatbot. Chatbot are fast, easy-to-use, and can address multiple customers at a time. They use artificial intelligence to mimic human interactions through a chat interface, allowing customers to obtain the information they want using simple, natural conversational language. Embedded in the customer service through major messaging applications, they enable personalized services, reduction in waiting time for users, uninterrupted customer support, and a feedback channel to a large number of customers, and guaranteeing consumer satisfaction. With chat bots, it is possible to increase efficiencies and automate the majority of all incoming queries.

Banking chatbot can help customers accomplish multiple tasks –

  • Simple routine jobs like checking account balance.
  • Paying credit card bills to more complex ones like opening a bank account, delivering real-time financial analytics and processing loan requests.
  • Chat bots today are quickly taking over the teller or the relationship manager’s place as a customer’s first and primary interaction point with a bank.
  • Chatbot are artificial conversational agent which is enough intelligent to initiate and simulate human like conversation.
  • The chatbot are designed as bots that analyze the content typed by the user and relate it to database that contains possible answer.
  • With AI progression’s and voice recognition the application of chatbot is increasing.

Banking chatbot can be broadly categorized in 3 parts –

  • First category involves FAQ, which are simple questions which you may want to ask your bank executives, for which there are simple structured answers. You ask question, Bots will respond and it learns along with way.
  • Second category involve financial transactions ,where in you can make fund transfer from person to person ,pay your bill or recharge your bills using queries.
  • In third category it involves helping people discover new features. These answers simple how to tasks such as how to reset your ATM Pin , which is a bit more evolved and is like interacting with your bank executive

EXAMPLES OF FAMOUS CHATBOTS AND UTILITIES

A) SBI, largest public sector bank with millions of customer is embarking on its AI journey from point of view of both employees and customer .SBI launched a national hackthon, ”Code for Bank”, for developers, students to come up with innovative idea and banking solution focusing on bots. SBI is currently using an AI-based solution developed by chapdex , the winning team from its first hackthon. The solution essentially scans cameras installed in branch and captures the facial expression of customer and immediately reports whether the customer is happy or sad. This is real-time or near to real time feedback. Chatbot of SBI is named “SIA”(Sales intelligence Assistant),launched is AI powered chat assistant that addresses customer inquiry instantly and help them in everyday banking task just like bank representative. This facilitates customer with numerous consumer banking actions. SIA is developed by PAYJO .It is setup to handle nearly 10000 enquiries per second which according to payjo , is 25% of queries processed by Google everyday.SBI claims SIA continuously learns with each interaction and get better over time. It is a machine learning based product. Currently SIA can address enquiries on banking products and services .It is trained with set of past consumer questions and is said to handle frequently asked questions aptly. Payjo developed SIA after studying how other banks were changing their customer service business models and basing their ideas on what they thought would succeed the most in the future .Then they would have unbundled the offerings of other banks and decided on which topics they could start building the chatbots to handle.SBI has successfully deployed workforce enablement tools like chatbots for improving productivity and quality of customer service personnel.

B) HDFC Bank’s – “EVA” (Electronic virtual assistant) is AI based chatbot application of hdfc bank. It is aimed to serve customer better and faster , by leveraging technology.EVA uses latest AI and natural language processing to understand user queries and fetch relevant information from thousands of possible sources .By conversing with EVA customer can get various information. EVA has already answered more than 5 million queries from around a million customers with 85% accuracy. EVA hold more than 20000 conversation per day.EVA can be connected on all digital channel of HDFC bank, i.e., website, mobile site and dedicated portals of bank customers. She is also available on voice via Google assistant .If you just say “ok Google, talk to HDFC bank” into your Google assistant you can talk to EVA. EVA can also be connected through Amazon echo devices, just say “alexa, open HDFC bank to connect with EVA.

         Questions like

         1) “Tell me IFSC code of —— branch”,

         2)” Current FD rates”

         3) “Give me the address of —- branch”

         4) “Rates and charges of ———-“

         5) “Documents required for ———– loan”

         6) “How can I get ——– loan”

         can be asked.

 

c) ICICI BANK- Bank has deployed robotics across 200 application across various function of company. The bank claimed to be 1 st among country and among a few globally to deploy this technology that emulates human actions to automate and perform repetitive and high volume and time consuming business task. ICICI launched IPAL chatbot. Since its inception till February 2020 it has attended 3.1 million customers and their 6 million queries along with 90 percent accuracy rate.

           IPAL is divided into three categories-

  • First category involves FAQ, which are simple questions which you may want to ask your bank executives, for which there are simple structured answers. You ask question, Bot will respond and it learns along with way.
  • Second category, It involve financial transactions ,where in you can make fund transfer from person to person ,pay your bill or recharge your bills using queries.
  • In third category it involves helping people discover new features. These answers simple how to tasks such as how to reset your ATM Pin, which is a bit more evolved and is like interacting with your bank executive.

The bank is currently in process of integrating ipal with existing voice assistant such as Cortana, Siri and assistant.

  1. UNION VIRTUAL ASSISTANT (UVA) – Chabot by Union Bank of India (UVA) is an artificial intelligence (AI) software that can simulate a conversation or chat with a human user in natural language through messaging application (text chats) or voice commands or may be both, which may be through Website, Social media platform ,or mobile apps. Techno savvy customers prefer self-service and they want quick and easy ways to get their queries responded. Chatbot conduct conversation to respond queries and deliver meaningful offer and make everyday banking easier, faster and convenient. Some of the salient features of chatbot are that they can handle Omni-platform concurrent queries, humanistic approach, predictive in nature, they conduct short and simple interaction with easy text driven conversation and also having simple user interface. They are at customer service 24*7*365 i.e. all the time.

UVA (Union bank of India’s Virtual assistant) help in redefining customer experience by (ASK UVA).The features offered after “How may I help you “ are-

  • EMI CALCULATOR
  • CALL CENTRE EXECUTIVE
  • DEPOSITS
  • LOANS
  • GOVERNMENT SCHEMES
  • INTEREST RATES
  • OTHERS

 

UTILITY OF CHATBOT AS A MODERN DAY BANKING TOOL

 As the globe continues to be impacted by the pandemic, consumers are relying on technology more than ever before. From using various technologies like video conferencing tools to communicate with friends and family at distant places to completing our daily routine tasks like depositing a cheque from a mobile banking app, it’s safe to say that the COVID-19 pandemic has further solidified the digital transformation that was already underway before 2020. Numbers of customers have increased their online banking usage during COVID-19 – indicating that the pandemic further accelerated the already trending adoption of digital communications using chatbots in the financial industry.

Just as digital technology is overtaking the banking industry due, in part, to consumers staying at home more often and avoiding in-branch transactions, consumers are utilizing chatbots in their digital communications with their financial institutions. Understanding from an analogy presented Back in 2011, Where Gartner predicted that customers would manage 85% of their relationship with the enterprise without interacting with a human by the year 2020 – a seemingly accurate forecast as the use of AI and chatbot technology has never been higher and is only expected to continue to surge. Today’s tech savvy consumers were beginning to adopt the idea of using AI to communicate with a business long before the pandemic. According to the 2018 Consumer Online Banking Report, 44% of those surveyed stated they would rather communicate with a chatbot than a real person, assuming it could answer their questions as reliably as a live agent.

As financial institutions take a more urgent approach to adopting new technology to help serve a much higher number of consumers through digital channels that ever before, the role of chatbots in banking for the coming years will be significant and ever expanding. Banks have been utilizing chatbots to help handle routine tasks like resetting a mobile banking password, transfer funds between accounts, pay bills or even open a new checking account. As technology advances and as the recent consumer adoption of this technology continues to progress, chatbots in banking will evolve to be capable of handling far more complex tasks, such as helping a customer get pre-approved for loan origination.

Most importantly, chatbots in banking will eventually become much more advanced in their ability to connect with the consumer on a more human level, turning interactions that have traditionally been very transactional into an experience that would be closer to the real life. People still want to bank with people, even if that communication takes place digitally. The future of enhanced customer experience will be a mix of serving customers both in-person and virtually.

WAY FORWARD

The Indian government is deeply committed to the research and usage of AI in the county. India recently joined the Global Partnership on Artificial Intelligence (GPAI) as a founding member. Along with 15 other nations, which include the US, UK, Australia, Canada, and France, the GPAI has been formed as an initiative to manage the responsible development and use of AI. The GPAI is a first of-its-kind of initiative for better understanding the challenges and opportunities around AI by using the experience of the diverse nations. India’s digital banking and finance sector, including retail banking, has witnessed immense growth in the past two decades. This transformation has primarily been driven by an increase in the use of digital payments across sectors and industries using chatbots.

The proliferation of digital payments and banking – which has helped generate financial transaction data that banks can use to monitor, predict, and respond to consumer behavior better – and the rising demand for online offerings of banking and financial information have opened up opportunities for chatbots implementation in retail banking and financial and  investment services in India. The use of chatbots in banks and financial institutions has the potential to transform how these entities operate. The banking industry is a critical backbone for India’s economic development. Adoption of AI by banks will help them scale and improve access. It will also aid banks in achieving better performance, higher profitability and reduction in risk. Data-driven decision-making using chatbots can help banks lend to priority sectors, increase client base and develop products that are suited to customer needs.

Chatbots can be deployed in banks across a range of functions for improving overall customer experience, making more informed decisions on credit underwriting, detecting frauds and defaults early, improving collections and increasing employee efficiency. There are some challenges that need to be addressed to increase the adoption of chatbots in the Indian banking and finance industry. These include training existing manpower in new skills; making the current banking processes adaptable with AI; increasing the capacity of customers to use chatbots systems; and ensuring data protection and privacy.

Banks and financial institutions stand to gain from the adoption of chatbots. It can lead to better risk management in these institutions, thereby improving their growth potential. Furthermore, chatbots can help banks adapt to the modern business environment and address various customer needs through product differentiation and the generation new insights from data. Chatbots are also being seen as an equalizer that will help in the creation of a fairer, more inclusive financial system. With the use of AI, and specifically chatbots banks can offer customers – especially those in rural areas, who are presently unable to access the desired levels of banking benefits – greater access to banking facilities, credit options, and wealth management products.

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