Conversational Banking In 2024: A Complete Guide!

Krishi Shivasangaran Published On December 19th, 2024 Tech Talks

Conversational banking is drastically transforming the way customers interact with their banks and FinTech organizations. This approach is emerging as the new trend for improving customer engagement and resolving their growing needs. 

According to a study by Accenture, almost 50% of the customers prefer to use their digital devices to sort their banking issues at the comfort of their homes, rather than driving down to a bank for human help. In this trend, statistics predict that  conversational banking market will reach $7.3 billion by the end of this year. 

To get into the details, this article will discuss the ins and outs of conversational banking, its benefits, challenges and future potential.

What Is Conversational Banking?

Conversational Banking is a two-way communication between customers and banking professionals in real-time to assist customers with banking. In-app chats facilitate conversational banking through chat, voice, and video calls on their websites or mobile apps with robust security standards.

In addition to this, conversational banking enables banks to gather valuable data on customer goals, financial behavior, intentions, and preferences. These key metrics can be used to offer personalized advice to customers, upsell or cross-sell products and services.

Conversational Banking: Benefits For Customers & Banks

Both customers and banking institutions enjoy a number of benefits from using conversation banking. Let’s explore them one by one below:

How Do Customers Benefit From Conversational Banking?

Different communication channels bridge the gap between customers and banking services instantaneously. It grants customers with a vast range of advantages.

Conversational Banking Trends

They include,

• Instant access to banking services
• 24×7 availability 
• Personalized service
• Active user engagement
• Omnichannel communication
• Covers multilingual audience
• Reduced wait times

How do FinTech Institutions Benefit From Conversational Banking?

Conversational banking is said to have reduced the manual efforts of banking personnels drastically by digitalizing services and ensuring the right service to customers right away. This helps FinTech companies to focus more on revenue, while the technology partially takes care of customer attention, engagement and conversion. So, here’s what banks will achieve when implementing conversational banking into their apps. 

• Improves customer satisfaction
• Reduced cost
• Scalability of services
• Minimal errors
• Improved net promoter score (NPS)
• Brand loyalty Improvement
• Reduces churn rates of customers
• Increase in conversion rates
• Boosts customer lifetime value (CLV)
• Lower operating costs
• Reduced fraud

Use Cases: Practical Scenarios Where Conversational Banking Is Used

The financial industry is experiencing a rapid shift towards digitalization, and conversational banking is at the forefront of this change. In various aspects, this technology is creating numerous opportunities for users to interact and engage more with their banks. 

Let us take a quick look into the different scenarios where conversational banking is used in the banking, financial services, and insurance (BFSI) sectors on a day-to-day basis.

1. Direct Messaging For Account Management 

These days, banks provide their customers with their apps to make it easier for them to send or receive money, manage their accounts and pay bills. In case of any inquiries regarding their account, or issues with transactions, customer will be able to contect the respective officials over in-app messaging. 

Yes! Banking apps come with a personalized chat option where users can directly chat with a customer care executive or banking personnels to get their finance-related issues resolved instantly.

2. Video Calls For Account Opening & Personalized Guidance

Gone are the days when customers need to travel miles to open an account with a bank or financial institution. Nowadays, banks connect users over a online video call, verify their identity and collect their details over the internet to open account, resolve queries, sanction loans and offer a variety of financial services. 

3. Voice Support For Inquiries 

Customers can make a quick call to their respective banks to get details about their account, block their debit/credit cards when stolen, reset their passwords and make complaints, if there are any. This ensures a quick resolution to their banking and finance related queries, without the need to wait long at the bank lobbies. 

Customers might have investment-related queries in Gold, Fixed deposits, and Crypto signals, which can be solved over conversation and boost profits.

It is no doubt that conversational banking is changing the way customer communicate with their banks. If you are someone who is looking forward to build this interactive technology into your app, you’ll find the upcoming section very helpful.

 

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A Step-by-Step Guide to Designing Conversational Banking Experiences 

To build a complete banking platform with interactive features, you’ll need end-to-end research on your goals, resource needed, implementation process and so on. Here is a detailed explanation on how to build conversations across your banking platform, in simple steps.

Step 1: Customer Journey Mapping 

Know who your customers are – This is the the first step to building a successful banking app with interaction-rich features. Understanding your customers, their needs and pain points refines your goals and directions towards building the best conversational experiences. 

Step 2: Identify The Frequently Asked Queries

Derive a list of questions that your customers frequently ask to your support agents. Automate them with natural language processing (NLP) and machine learning (ML) techniques if necessary, otherwise connect them directly to your representatives via voice, chat, or video calls.

Step 3: Choose an in-app communication provider

This step is essential if you are planning to integrate video, voice, or chat features into your existing apps. Instead of building every feature from scratch, you can easily create an account with in app communication providers like MirrorFly, and get instant access to feature-rich conversational SDKs for your apps.

Step 4: Set Up Conversational Privacy & Security

Since you are building conversations that involve money, there are huge chances of attacks or intrusions into your apps. This could be completely avoided if you set up iron-clad security infrastructure with compliances like GDPR and ISO along with secure messaging and calling features. 

If you feel this overwhelming, you could simply opt to add the pre-built features, as mentioned in the previous step. These SDKs are most commonly built with industry-grade compliances and encryption protocols to protect interactions.

Step 5: Measure Engagement And Improve

When you set up an omnichannel interaction platform, there are huge chances of multiplying your customer engagement and eventually their retention rate. On this accord, you’ll need to study the conversation patterns, the time they spend on your apps, what they like and dislike. This way, you’ll be able to fine-tune your features and ensure that your customers are completely satisfied with you app.

Conversational Banking: The Future And Beyond 

In the last 15 years, Banking has changed a lot in terms of technology and communication. It has taken a long route from physically operating branches, dedicated call centers, official websites and now apps. But the growth just doesn’t stop here. 

Conversational banking has started to revolutionize digitalized communication across banking apps, making two-way interactions more viable. You can also see that many apps support crypto signals these days. Although this technology is only at its early stage, it is no doubt that it is soon to take over the industry with world-class digital banking experiences, with the power of conversations.

Here are a few reports that significantly boiled down this fact into approximate numbers: 

• Conversational Banking: The Future of Banking by Juniper Research
• Conversational Banking: The Next Frontier for Financial Services by Infosys Finacle 
• The Future of Banking: From Clicks to Mortar to Conversations by Accenture
• Conversational Banking: Delivering Personalized and Seamless Customer Experiences by Cognizant

Coming to the closure, we hope this article gave a clear picture of conversational banking and the steps to implement the technology into your app. As mentioned above, conversational banking is all set to take over the industry with feature sophistication for customers. If you’d like to add these features to your app, MirrorFly can be a go-to option to take your first step. 

Like to know more about how MirrorFly could help you build the technology? Leave us your comments below and we’ll dive right in to resolve your queries. 

Happy developing! 

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Further Reading

• How to Build A Flutter Video Call App in 2024?
• How to Build a React JS Video Chat App in 2024?
• How to Build an Android Voice and Video Calling App Using Java?
• Communication APIs: Top 7 In-app Chat, Voice & Video APIs
• Top 9 Secured Web Services to Build Your Own Video Calling App

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