Conversational banking vs banking apps

Apr 22, 2020

Conversational banking, or the use of chatbots and messaging apps for banking has great potential.



There’s an argument to be made for the value of banking apps and how valuable they can be for the end-user. It is a valid argument, and it sometimes extends to say that they make chatbots redundant or unnecessary. But unless your customer base is made entirely of people that can afford the latest, top of the range, smartphones and live exclusively in areas with reliable high-speed mobile connections, the argument doesn’t hold up.

The issue here is that banking is a very sensitive issue for most people. Most of us have all of our life’s savings in a bank account. The number one thing we need from a bank is the feeling that our money is safe and accessible to us at any time. Apps are great at providing information but take up space on our phones and are less reliable than apps like WhatsApp that can afford to employ over 50 engineers to constantly maintain and upgrade them.

The advantages of conversational banking

Conversational banking or banking is done via conversations in messaging apps, is in many ways a necessary complement to traditional app-based banking, and in some markets a necessary replacement. Banks, especially smart ones, have long understood the need to provide on the go access to their services, especially for basic things like checking account balance before making a purchase or verifying if some important payments have been received.

In a world where people are increasingly connecting to the internet, mainly via mobile phones (especially in emerging markets), and banks are cutting the number of physical offices to reduce cost, consumers demand mobile access. Until recently, apps provided the only way to have a secure enough connection with the customer, leaving any customer who didn’t have a powerful smartphone and high-speed internet, effectively disconnected.

Today modern technology in the shape of custom-built chatbots and artificial intelligence can now provide equally safe connections and allow users to bank straight from the likes of WhatsApp and WeChat.

Going beyond the app

The greatest advantage of conversational banking is perhaps the way the interaction takes place. Apps and websites use a human-to-machine type of interaction where the users look for information in menus and screens. This is fairly natural to use for most users who are used to computers and the internet, but it is not as natural as simply talking to someone and asking for information.

Using conversations as the primary means of interaction has the great advantage of making things simpler and, thanks to modern chatbots, it can allow for a seamless transition between chatting with an automated system and a human being. Banks can take advantage of this by having their chatbots pass-on any non-standard request to a human agent, allowing the user to do everything they need without leaving the app or having to call a customer service line.

As an added benefit, this will reduce the human hours and money that banks need to invest in customer service since a significant part of the requests will be handled directly by the system. Moreover, when the customer reaches the human agent, the chatbot will be able to provide the agent most of the information they would usually need to ask the customer, making the interaction smoother and faster.

Each bank will, of course, face a different competitive environment and have unique challenges connected to the way it does business. To get the most out of a modern chatbot system they will need a custom-built system. If you are interested in diving deeper into the opportunities available to your company, our team of experts will be happy to help. Please reach out to them by using the link below.