Banking Finance 2023, Banking Finance May 2023

Reinventing Customer Experience through Conversational Banking


The Banking, Financial Services & Insurance (BFSI) industry is continuously undergoing a remarkable digital transformation that is leading the way with new FinTech, InsurTech and RegTech services. Taking a cue from this, banks that have moved from traditional banking methods to digital methods should start thinking about engaging their customers through conversational banking strategies.


Research shows that most of the institutions, at some point, considered determining the next best action in customer communication using strategies that involved optimizing the use of technology by leveraging Customer/ Data Analytics, Artificial Intelligence and Machine Learning to improve the overall experience of the customer.


What is Conversational Banking?

Conversational banking means banking digitally through voice, text messaging apps or by engaging the customer using visual tools. The communication can take the form of a chat, either text or voice or video, where the customer can directly chat with the bank. Soon, this can even take the form of communicating face-to-face in a virtual environment (metaverse, for example).



Conversational banking facilitates customers to interact with chatbots, voice assistants, human agents via live chat, mobile apps to get customized advice. By adding a personal touch on the customers’ preferred mode of digital interaction, along with the convenience, they are also offered a quick and logical solution with an emotional touch.


 Means of Conversational Banking

Support through Automation

Chatbots in banking can assist to conduct a wide variety of financial transactions in a customer-friendly conversational manner. This interaction is conducted securely and offers a range of transactions like account overview, funds transfer, policy renewal, refund processing, and similar simple tasks.


Bank of America deployed a virtual financial assistant named Erica, a bot that has efficiently handled customer service queries in various ways like sending notifications and providing balance information, sharing money-saving tips, providing credit report updates, facilitating bill payments, etc.Closer home, State Bank of India has deployed virtual assistants in all its apps and websites like SIA, SBI Voice Assist, ILA, etc that guide and engage the customers for their basic banking needs.


Support in Real-time through co-browsing

Co-browsing is a live engagement tool, which is collaborative where both parties can browse together and interact in real-time. This scenario allows agents to see what the customer sees making the interaction successful. The security aspect is taken care of by blocking other information on the device and by masking certain fields with sensitive information.


Co-browsing benefits

  • Personalized service delivery
  • Faster resolution rate
  • Customer education

Support in Real-time through Video Tools

One step ahead of support through chat is extending the same through video-based tools. In situations where the customer is unable to visit physically, this type of interaction would be a blessing that will help build an effective relationship. The video interaction can also be used for product demos for seamless on boarding as visual communication is always better. The round-the-clock service offers customers to converse with a video banker through a smartphone, tablet, or computer at a time and place convenient to them.


Experience Design

To create a great conversational banking platform, thereby, creating an appealing experience to the customer, the flow of the financial services offered have to be streamlined.

The steps to be followed are

  1. Identify all the customer interaction touch points and deliver a consistent omnichannel experience.
  2. Divide the customer journey based on their category like established, new and prospective customers.
  3. Identify common queries and automate the same using a bot. Repetitive and general questions can be handled by the automated system more efficiently.
  4. Make sure that a human agent is available to take over complex queries where the bot cannot handle,and the switch must be seamless.
  5. Engage the customer in real-time chat, voice or video (even co-browsing) to deliver effective solutions with personalized conversations.


Customer Data Privacy

Customer data, being a huge responsibility for the banks, risks associated with conversational banking must be completely taken care of to protect the data and retain trust.

Measures banks can adopt to protect data are

  1. Leveraging automated technologies like chatbots also means several security measures can be built-in to protect customer data like proper identification and authentication.
  2. The messaging app used by the customer for the banking services should be secure with no data storing capability and fully encrypted end-to-end.
  3. The coordination and collaboration among the teams like technology, information security, finance, legal and compliance in the bank will pave way for a safe and secure banking experience.
  4. In the case of third-party tie-ups in, sufficient care should be ensured for confidentiality and non-disclosure.



The Near Future

The influence and involvement of conversational interfaces are going to be huge for banking services. The landscape in conversational banking will surely undergo drastic change and can shortly be more advanced.

  • In addition to handling common queries, conversational AI will be able to handle complex queries and respond accordingly by understanding the mood and emotion of the customer.
  • The hybrid form of interaction will be the norm with a convenient mix of chat, voice and human interface.
  • The shift between channels will be smooth with the continuation of the contextual engagement seamlessly to avoid repetition.


The next big step will be opening the banking channels completely to popularly available voice assistants (like Siri, Google Assistant, Alexa, Cortana) and messaging applications (like WhatsApp, Telegram, Signal, Messenger, WeChat, etc). In fact, this is already a reality as banks worldwide and a few of them in India (like Axis Bank) have enabled this facility in smart speakers.And many have integrated their services with messaging applications to offer services over chat.



An approach with suitable policies and vision in building AI-based conversational banking solutions will surely help banks gain substantial yields. Research and experience to date show that conversational banking can aid in revenue growth significantly in addition to cost reduction. This itself should push banks to grab the opportunity and embrace the trend to offer a personalized experience through customers’ preferred means.

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