Conversational Banking: How to Start the Conversation

"How satisfied are you with your bank?" is a staple question in Voice of Customer (VOC) surveys. However, one question that is almost never asked is "How proactive is your bank in reaching out to help you with your unique financial goals?" A handful of banks are emerging as leaders in this respect, becoming proactive by deploying high tech conversational banking capabilities that enable crucial two-way conversations with their customers. These banks realize that conversational banking is fast becoming the "third pillar" of their bank distribution network, along with mobile banking and an optimally sized branch presence.

Data indicates that 63% of customers use messaging apps to talk to brands, according to a survey by Accenture and The Financial Brand in February 2018. A survey by International Banker in July 2018 found that 67% of banks use some form of Artificial Intelligence (AI), Natural Language Processing (NLP), and Machine Learning (ML) in their front, middle and back offices today. This confluence of the mass availability of technology and the customers' willingness to use it creates the perfect synergy for conversational banking. Coupled with the fact that Big Technology companies such as Amazon, Netflix, and Google have mastered the art of hyper personalization, banks have no other choice but to embark on this conversational banking journey.

So how can a bank embark on this journey? To begin building a successful Conversational Banking Strategy, the bank must consider the following components and take three broad steps to:

Understand where your customers are – It is important for banks to understand what their customer touchpoints are and how the customer moves from one touchpoint to another. Banks do this by plotting out journey maps. This is a good way of exposing friction in the user journey, and provides an opportunity for the bank to eliminate or mitigate these as it works to improve the user journeys and make them suitable for conversational banking.

Determine what capabilities to offer – Once the financial institution has plotted out the user journeys, it is important to strategize and prioritize what capabilities should be offered through a chatbot. These could be existing capabilities or net new capabilities that are conducive for conversational banking. The capabilities that banks want to offer to their customers can usually be classified into three types of categories:

Awareness – These capabilities provide financial awareness to the customer. These are simple servicing transactions that are largely available in mobile banking today (for example, balance lookups, paying bills, providing alerts to the customer, etc.).

Optimize – Goes beyond financial awareness to financial coaching, and includes capabilities such as setting a budget, recommending the right credit products and debit products, etc.

Intelligent – Takes personalization to a new level by anticipating customer needs and provides the shortest path to achieve life goals. Examples include purchasing a home, buying a car, planning for college, etc.

It is important that banks employ a crawl, walk, run approach to deploying these capabilities – with the lessons learned in each phase applied to subsequent phases.

Select the right bot(s) – It is necessary to understand the benefits and constraints of the different bot types before one or more bots are selected. The bots could be built on messenger apps such as Facebook, Twitter, etc.; could augment voice assistants such as Siri and Cortana; and they could be an extension of online and mobile banking. In all cases, ensuring user authentication is essential.

When one or more bots are selected, ensure that the customer can seamlessly navigate between the bots, as well between legacy channels and bot channels. We must learn from the past: When banks introduced their online channels, and subsequently their mobile channels, they were introduced as silos in which one channel did not know about the customer interactions on the other. Banks should not repeat the same mistake again with chatbots; they must take this into consideration as part of their omnichannel strategy. Banks should integrate chatbots on their existing or soon to be deployed omnichannel frameworks. This ensures a frictionless user journey across channels and devices.

I believe that conversational banking is going to create disruption in the financial space much like what mobile did ten years ago. It is important that banks embrace this distribution channel to hyper personalize their customer experience and continue to preserve their customers' trust which they have worked so hard to gain.