What Is Conversational Banking

What is conversational banking, why will more banks do it

Conversational banking is mobile banking 2.0. It is adding interactivity through text, voice, video, and AI on mobile banking functionalities we have today. Modern mobile banking technology covers most of what we can do in a branch. However, it lacks that personal touch that a branch can offer. That is where AI-powered conversational banking comes in; it adds interactivity to online banking instead of the one-sided interface that it is now.

But why bother? If current technology and functionalities cover almost all that we can do in a branch, why is it necessary to take it a step further?

Why is conversational banking the future of mobile finance?

According to the tech giant IBM, conversational banking is the next step to get ahead in the current competitive landscape. Customer demands are rising, so are costs and security threats. Implementing an AI-powered banking interface is a solution to all three pressing business needs in the finance sector.

But is it really necessary? According to a Moz study of Google statistics, it is. About 8% of all Google queries are phrased as a question. Google Assistant/Voice, Siri, and Amazon Echo are changing user behavior when it comes to searches. 

Google is even encouraging it by showing question-based answers as top organic results. People are getting comfortable talking to machines. They understand that it can answer their questions. If it can do that in other fields, why not banking? That’s what conversational banking is all about.

Conversational banking, the future, and beyond

The finance sector is not alone in terms of implementing a “bi-directional” interaction between humans and machines. Humans still want conversations; they still want to interact with companies they do business with, even if customers are aware that they are interacting with an AI.

Current mainstream banking technology is only a self-serve interface. If a client wants to make changes on their account, they have to do it themselves. In contrast, when a client is in a branch, the bankers will not only offer you the best options, but they will also facilitate the transaction for the client once a decision is made.

That is precisely what conversational banking will do. It will act as your friendly neighborhood banker at the palm of your hand. Banks themselves know that this is what their clients want. An Accenture study shows they are aware and up to the challenge. The advancements in AI technology already prove that the pieces they need to implement conversational banking already exists. They just need to put it together to serve their customers better. Here’s how:

• Text and voice-based bi-directional interaction add the personal touch that isn’t there in mobile banking.
•  It can easily support one-to-one and many-to-many conversations and save costs on customer service personnel.
•  Learning AI can improve interaction with clients over time.

To sum it up, conversational banking is the logical next step to mobile banking. It can make mobile banking more efficient and yet more human, and bankers can gain further insight into their customer behavior. It’s a win-win deal.