AI Banking Chatbots: Use Cases, Benefits, Examples, and More

The banking industry faces several challenges, from managing high customer queries to ensuring round-the-clock service without inflating operational costs. Traditional banking methods often struggle to keep pace with the growing demand for instant, round-the-clock assistance.

Customers expect answers now, not later, and failing to meet these expectations can result in lost trust and loyalty.

Need a Proof?

According to Ozonetel call center report 2022, Call abandon rates have increased by 200% since 2019 due to long customer wait times. This has majorly impacted customer experience and business growth as well.

For instance, you might have encountered the frustration of navigating the “press 1 for this” and “press 2 for that” menus while trying to connect with customer support. Isn’t it an annoying experience?

Now, imagine your customers facing the same ordeal. Poor customer experiences are not an option in a competitive sector like banking. For banks, this also means dealing with repetitive tasks, which strain human resources that could be better utilized for complex problem-solving.

This is where chatbots in banking step in.

Powered by AI, these intelligent solutions eliminate the clunky “press 1, press 2” systems, delivering instant, personalized support and freeing human agents for more complex tasks. The impact is deep and far-reaching.

Gartner predicts that by 2027, chatbots will become the primary channel of customer service for nearly a quarter of organizations. According to a Bain & Company study, AI systems enable banks to achieve a 99% reduction in downtime. By 2026, bot interaction success rates in the banking sector will surpass 90%. These figures emphasize that AI chatbots in banking are essential to staying alive and kicking.

Banking AI chatbot marks a new phase of revolution — from mobile banking to conversational banking – unlocking a wealth of applications and advantages. Let’s explore them in detail.

Boost your bank's ops with AI chatbots that save millions of hours and keep it rockin' 24/7 with 99% uptime. Let’s team up and make this transformation a slam dunk.

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A Glimpse at the Potential Use Cases for Chatbots in Banking

There are endless use cases for chatbots in banking. Let’s explore some of them in detail to understand how a finance AI chatbot works to redefine the sector and enhance customer experience.

1. Ease of Use

Customers often get frustrated and leave the banking platform if asked to fill in their details repeatedly. Here, banking chatbots come to their rescue without compromising authenticity and security. The bot interacts with the customer and uses conversational elements to ensure authenticity. Besides, it lets the customers repeat their previous transactions/activities with a single command.

2. Personalized Banking Services

The AI-powered chatbots have simplified the process of account management. Standing in long queues at the bank and doing tedious paperwork to access banking services is history now. Today, users can check their bank balance, get a statement, transfer money, update their banking details, and perform many such processes with just a few taps on their phones. A user must answer a few questions, and the bot will complete the whole process. Isn’t it easy?

AI chatbots for FinTech allow customers to view a graphical representation of their transactions and give budget management advice to take their next financial step wisely. In a nutshell, a chatbot for finance empowers your customers to leverage the benefits of your different banking services without putting much effort and time into them.

3. Omni-Channel Support

With a wide range of communication channels available around, it is quite tricky for banks and financial institutions to reach their target audience and cater to their needs. They find it hard to plan for each communication channel – messaging service, website, app, emails, call – and get higher value from each platform. However, it is possible with chatbot development.

A bot can act effectively across all the platforms without having to be reprogrammed individually. They can even be integrated across social networking platforms such as WhatsApp,  Instagram, Meta Messenger, etc. It can offer a holistic communication medium across all the platforms, providing ultimate services to customers in a way that fits their lifestyle. In other words, chatbots empower banks to offer omnichannel support without making a hole in their pocket.

4. 24×7 Digital Support

Unlike humans, AI chatbots for finance do not feel fatigued and enable the sector to deliver 24×7 assistance to their customers. The bots help customers with different tasks like updating their KYC details, getting familiar with new schemes and services, troubleshooting account-related issues, etc. The chatbots resolve the user queries in minimal time, acknowledge them about the same, and ask for the next command, which enables the users to ask multiple queries in a single conversation.

Customers need not get into the hassle of calling customer care centers and waiting for hours on the phone to get their common queries answered, such as:

• What is my current balance?
• What are the bank’s operating hours?
• How do I apply for a credit card?
• What is the interest rate on my loan?
• How do I open a savings account?
• What are the EMI options for personal loans?
• What is my eligibility to get a business loan?

Do you know that approximately 65% of customer queries are repetitive? This makes it practical to implement a voice-enabled bot to handle them efficiently. An AI chatbot for banks can quickly address these FAQs at any time of the day, no matter where you are.

5. Efficient Loan Application Assistance

Chatbots streamline the loan application process by offering step-by-step guidance, from eligibility checks to document submission. They answer user queries in real-time, reducing the need for manual intervention and ensuring clarity. Chatbots provide timely updates on application status and repayment schedules, creating a seamless and transparent experience for borrowers.

Also Read: Loan Lending App Development: Features & Costs

6. Fraud Prevention

Another reason behind the rising popularity of Chatbot banking apps is their functionality for fraud prevention. Chatbots constantly monitor the actions taken related to financial services, like withdrawing money, swiping a card, etc., in real-time. When suspecting an anomaly in the user’s banking behavior, they instantly notify the account holder, acknowledging the activities and allowing them to stop the transactions using a pre-customized command. This way, banking chatbot development empowers banks to prevent fraud and build customer loyalty. Thanks to AI chatbots in banking!

7. Personalized and Profitable Marketing

Banks provide a myriad of facilities. However, not all customers are familiar with all their banks’ perks and privileges. A chatbot understands human behavior and pushes the related banking service/products at the right time. This way, it promotes the banking services and increases the conversation rates without annoying users.

8. Launch of User-centric Schemes

Intranet-based chatbots learn from the user behavior and prompt them to share their feedback. With the insights obtained from all the branches, the chatbot helps the banking management to study the impact of their existing schemes and refine them or introduce new plans, if necessary.

9. Efficient Workforce Functioning

Employees are no longer required to log in to HRMS and request to access/update their details or apply for a leave. With the help of AI-powered chatbots, they can easily apply for leave, view their personal and payroll details, request overtime payments, check their compensation history, and much more. They can also interact with bots to get their doubts clear and work more efficiently. In short, the chatbot assists the employees and encourages them to work to their fullest potential without third-party intervention.

10. Process Automation

Finance AI chatbots also automate repetitive and time-consuming banking tasks like transaction monitoring, account updates, and bill payments. By leveraging AI, they handle these processes with precision and speed, reducing the workload on human staff. This enhances operational efficiency and minimizes errors, ensuring a smooth and reliable customer banking experience.

11. Improved Financial Literacy

Chatbots empower users with knowledge by breaking down complex financial concepts into easy-to-understand explanations. They provide personalized savings, investments, and credit management guidance, helping users make informed decisions. Chatbots facilitate a deeper understanding of financial products by engaging users with interactive tools and real-time assistance, promoting better money management habits.

A great example is EdFundo, a financial literacy app Appinventiv developed to educate young users about budgeting and saving through gamified learning. The app simplifies financial concepts by incorporating chatbot-driven interactions and encourages smarter money management from an early age.

What is the result of Edfundo’s app development partnership with Appinventiv?

$500K                                                  $3 Million

Bagged Pre-Seed Funding                Prepared for seed funding

View Case Study

6 Amazing Benefits of Chatbots in Banking

Banking chatbots have become a dire necessity for the financial sector, offering numerous advantages that address the needs of both banks and their customers. Here are some of the most common benefits of banking chatbots transforming the industry with their intelligent automation capabilities.

Improved Customer Support

Chatbots provide 24/7 assistance, ensuring customers receive immediate responses to queries at any time of the day without waiting on hold or navigating endless menus. This instant support facilitates trust and improves customer satisfaction.

Lower Costs, Smarter Operations

Chatbots handle repetitive tasks like balance inquiries or transaction updates. It reduces human agents’ workload and frees them to focus on complex issues. According to Gartner, by 2025, organizations using chatbots will cut customer service costs by $80 billion.

Improved Efficiency

Chatbots speed up routine banking processes, such as helping a customer check their credit score or guiding them through a loan application. This allows banks to process high volumes of customer interactions more efficiently. The result? Faster service and happier customers.

Personalized Banking Experiences

Chatbots analyze customers’ data and offer tailored advice, such as personalized saving plans or investment recommendations. It’s like having a financial advisor in your pocket, available anytime.

Enhanced Scalability

During peak times, human agents can get overwhelmed. Chatbots, however, can handle thousands of queries at once without breaking a sweat. This capability ensures that no customer is left waiting.

Boosting Workforce Productivity

By automating repetitive and rule-based tasks, chatbots free up employees to focus on high-value responsibilities such as strategic decision-making or complex customer concerns. The result is enhanced workforce productivity.

Real-World Examples of Banking Chatbots

An AI chatbot in banking is a game-changing technology that redefines the industry with its intelligent automation capabilities. These intelligent chatbots for banking offer real-world value through instant assistance and personalized interactions. Here are some leading examples of AI chatbots for banks and financial services:

Erica

One of the best examples of banking chatbots is Erica, a voice- and text-enabled BofA (Bank of America) bot that helps customers make smarter and faster banking decisions. The digital assistant sends personalized notifications, studies customer transactions, and identifies the areas where they could save money, facilitate bill pay service, and much more.

Ally Assist

Ally Assist – the personal digital assistant of Ally Bank is another example that proves the impact of AI-based chatbot services on the financial industry. Using natural language processing technology, the bot helps users monitor their accounts, pay bills, make transactions, track transactional patterns, etc. This way, the bot uplifts the customer experience by acting upon common customer service queries and making the bank representative free to perform complicated tasks.

Mudra

Mudra is another head-turning example of a banking AI chatbot that revolutionizes budget management for millennials. Appinventiv developed Mudra, which tracks user expenses and provides real-time alerts when spending exceeds set budgets. By incorporating interactive elements and gamified experiences, Mudra transforms traditional budgeting into an engaging and user-friendly process, making financial management both accessible and enjoyable for the younger generation.

Chatbot technology and Artificial Intelligence in banking make the sector efficient and effective by delivering contextual and personalized responses. Though the future of conversational banking is not yet clear, the growing adoption of FinTech app development services in the banking sector proves the competitive benefit of investing in the technology over those who are still wondering about their next move.

What is the Banking Chatbot Development Cost

The cost of developing a banking AI chatbot varies widely, depending on various factors such as the product’s complexity, features, integrations, and the development approach. Additionally, the choice of a development team—an in-house team, a local agency, or an experienced offshore partner—also impacts costs. Other considerations like the chatbot’s deployment platform (mobile apps, web portals, or both), the geographical location of the chatbot development company, ongoing maintenance, and scalability requirements also influence the banking chatbot development costs.

The cost to develop an AI chatbot for banks ranges between $30,000 to $300,000 or more. Remember, it is just a rough estimate; banking chatbot development costs depend on your unique project requirements.

Here is a table outlining the banking chatbot development cost and timeline based on the product’s complexity and features:

By 2026, chatbot success rates in banking could exceed 90%, saving millions of work hours.

Step into the future of banking with automated chatbots.

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How Can Appinventiv Help You with Banking Chatbot Development?

Appinventiv specializes in creating intelligent and secure chatbots for banking and financial institutions that are tailored to your unique business requirements. With a proven track record of delivering 3000+ successful projects and AI chatbots for businesses, we are your trusted banking software development company.

From automating customer queries to enabling personalized financial assistance, our chatbots are designed to enhance operational efficiency and user satisfaction. Our ability to integrate the finance chatbot with your existing banking infrastructure sets us apart. Whether it is connecting with core banking systems, payment gateways, or fraud detection platforms, we ensure that the chatbot performs optimally and aligns with your organization’s goals.

By partnering with us, you gain access to a dedicated team of 1600+ tech experts who prioritize security and compliance at every step, ensuring that sensitive customer data is handled with the utmost care.

So what are you waiting for? Contact us now to build an AI chatbot to elevate your digital transformation journey and keep your bank ahead in today’s competitive world.

FAQs

Q. How does a chatbot for banking work?

A. Banking chatbots use artificial intelligence (AI) and machine learning (ML) technologies to understand and respond to customer queries. They rely on natural language processing (NLP) to interpret and analyze customer text or voice input and then deliver relevant responses. Depending on their complexity, they can handle customers’ queries like account balance checks, transaction histories, loan application status, personalized financial recommendations, etc. What’s more? Modern AI chatbots in the banking industry constantly learn from past interactions, improving their ability to provide more precise responses over time.

Q. How are chatbots used in banking?

A. Chatbots in banking are used to automate banks’ operational processes and enhance customers’ experiences. Some of the most common applications of AI chatbots in financial services are:

• Personalized Banking Services
• Omni-Channel Support
• Improved Financial Literacy
• 24/7 Digital Support
• Loan Application Assistance
• Fraud Prevention
• Personalized and Profitable Marketing
• Launch of User Centric Schemes
• Efficient Workforce Monitoring
• Process Automation

Q. Is it secure to integrate AI chatbots into banking financial infrastructure?

A. Yes, it is completely safe to integrate chatbots into the financial infrastructure. An AI chatbot for banks is designed with high levels of security to ensure that sensitive customer data is protected. They employ data encryption, secure authentication, and fraud detection techniques to keep transactions and communications safe.

Additionally, chatbots follow stringent compliance regulations, such as GDPR and PCI-DSS, to handle customer information responsibly. Banks also implement regular security updates to protect against potential vulnerabilities or cyber threats, ensuring a secure user environment.

Q. How do AI banking chatbots integrate with existing infrastructure?

A. AI banking chatbots rely on Application Programming Interfaces (APIs) to integrate with core banking systems and CRM platforms. These APIs allow the chatbot to access real-time business and customer data such as new schemes, account balances, transaction histories, and other account-specific information. Based on the accessed data, the chatbot generates relevant responses.