Why The Pandemic is Driving Interest in Conversational Banking

With physical branches closed and customers spending more time at home, the popularity of mobile banking has skyrocketed. The interest in conversational banking, especially as a means to ease the pressure on support teams, has also increased.

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According to data collected by Fidelity National Information Services (FIS) and reported by CNBC, April saw a 200% jump in new mobile banking registrations. At the same time, mobile banking traffic rose by 85%. 

More notably, however, a recent survey by fintech company Novantas, only 40% of respondents said they expect to return to branches post-COVID, indicating the shift to online is likely to stick.

The popularity of mobile banking highlights the need to provide customers with a broader range of digital services. Conversational banking has emerged as a solution to help banks manage costs, meet SLAs, and offer enhanced value to customers. 

Meeting and tracking SLAs 

Banks have long struggled to meet, measure, and report on SLAs (service level agreements). Now, some are finding it even more difficult. 

For many banking customers, the pandemic brought financial stress and questions about their situations. People scrambled to defer loans, explore relief programs, and understand their options. In the U.S., questions related to stimulus payments also drove behavioral changes. 

This lead to unprecedented call volumes for retail banks -- and unprecedented wait times for customers. For many banks, First Response Times (FRTs) suffered. 

On the other hand, those that had already invested in conversational banking were prepared to deal with the increased volume of calls. They steered customers towards digital channels for immediate service, reducing the pressure on human agents. 

In short, chatbots and conversational apps are helping banks do more with less. They allow banks to decrease First Response Times and Time to Resolution.

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Tracking SLAs through automation

In addition, conversational banking helps businesses track their key metrics. It's not always easy for agents to quickly understand SLAs and what they’re being measured on. This becomes even more difficult as agents face unprecedented call volumes. 

Conversational apps and chatbots solve this issue. They capture important data related to SLA targets that can easily be turned into insights. 

IT managers see this as a major win. Reporting on SLAs traditionally involves extracting a ton of raw data, writing custom queries, and building complex Excel formulas and reports. And, things get even more complicated when an SLA needs to be changed. A solution that automates this reporting helps banks react and adapt quickly.

Conversational banking reduces customer churn

Incumbent banks are using conversational banking to cut churn to challenger banks. In times of crisis, when emotions are heightened and individuals are feeling insecure, banks need a communication strategy that will help retain customers. 

Especially now, banks can't afford to lose customers to poor service experiences. It is much easier to retain customers than acquire new ones; the acquisition cost of a retail banking customer is roughly $200. 

Messaging is key to increasing customer loyalty without incurring additional costs. Studies show that the majority of consumers prefer virtual assistance for timely issue resolution. 

Banking customers value the context, speed, and personalization that automation provides, which improves customer satisfaction. Automation also quickly evaluates, escalates, and routes complex issues to humans for resolution — these things combined create a well-oiled customer service machine.  

Banks investing in conversational banking 

Below are just a few banks investing in conversational banking in the wake of COVID-19. 

Deutsche Bank

Last month, Deutsche Bank announced the onboarding of a new digital employee, named Blue Bot ‘Yi’, within its Corporate Bank division in China.

This is the Corporate Bank’s first digital employee with a client-facing role. It will be responsible for handling financial reports and processing client inquiries. 

Goldman Sachs

Goldman Sachs recognizes that digital banking has, by necessity, taken off amid the coronavirus pandemic. The bank is rolling out AI-enabled money management tools for Marcus, its digital-only bank. 

Marcus launched in 2016 and is central to Goldman's consumer banking push. An AI assistant would join other planned offerings, including a checking account.

U.S. Bank

Last week, U.S. Bank announced its plans to roll out a virtual assistant in its mobile app to let customers manage their money with voice commands. According to an announcement shared with Mobile Marketer, The U.S. Bank Smart Assistant can provide information about account balances, upcoming bills, and spending history, and handle tasks like money transfers. 

Standard Bank Group

Standard Bank Group in South Africa quickly opened up service options on WhatsApp in response to COVID-19 related pressure. 

“Our customers’ financial wellbeing remains one of our main concerns. We know that South Africans are isolated but still need information. It was important for us to develop this tool so that we could provide our customers with the banking-related information that they need instantly and on a platform that they understand, and communicate on every day,” says Deepesh Thomas, Head of Wealth Digital at Standard Bank.

The opportunity for traditional banks

At a time of uncertainty and recession, customers want stability and familiarity. This is something that the long-established, traditional banks can offer. Now is a key moment for traditional banks to take back market share lost to fintech companies and challenger banks.

By investing in digital banking, namely conversational baking, traditional banks can win customer loyalty at a time when it matters most. 

Start planning your conversational banking strategy

At Hubtype, our experts make it easy to understand which conversational banking options are right for you. Our technology is scalable, flexible, and ready to grow with you and your customers. 

Get in touch to understand how we can help.