Conversational Platforms in Banking - Thematic Research

Conversational Platforms in Banking - Thematic Research

Summary

Artificial intelligence-powered tools can help address many customer enquiries, but they can also cause frustration if not properly supported. Experience from other implementations is that banks must be upfront about what the bot can be expected to do, and direct consumers to it with the right expectations. It is critical to have smooth hand-offs and channel transitions at moments of complexity, ambiguity, or other types of financial stress. Overall, a bot-only approach is doomed to failure. However, judicious use of bots with careful design can reduce costs, dramatically increase customer satisfaction, and free up advisors for more complex sales and service interactions.

2016 saw an explosion of interest in chatbots, as financial service providers rushed to launch the ‘next big thing’, promising low-cost, personalized, secure, 24/7 customer support for everything from balance checking to complex sales and service. By 2017–18, many of the first movers had scaled back bots or removed them completely, and by 2020, many new entrants were using the absence of bots as a competitive differentiator. Even today, JPMorgan Chase’s new UK digital bank, Chase, advertises itself as “only humans…no bots”.

Those banks that have taken a more measured approach, designing bots to deal with specific processes and task-flows that absorb most call center resources, have taken out significant costs with limited broken glass in terms of customer satisfaction. Bots for internal document processing and specific customer-facing tasks have both proved effective. These bots have primarily been text-based, existing on bank web pages and in mobile apps, but especially in third-party messaging platforms, such as Messenger and WhatsApp.

Social media style interfaces, sitting at the heart of super apps, have reset consumer expectations. Banks are emulating these principles to offer always-on, personalized ‘advisor-in-pocket’ propositions. These services have much in common with robo-advisors and personal financial management, yet go one step further in being accessible outside of proprietary banking channels, where users spend most of their time, operating by text and/or voice. However, demand for these services, across all age groups and wealth brackets, remains in the low single-digit percentage point category.

Scope

We surveyed consumers on satisfaction with chatbots across key geographies, and we see that at 86% the US has the highest level of satisfaction and implied comfort with bots among bank customers, while Australia sits at the lowest level of satisfaction (81.9%), with the highest percentage unsatisfied at 18.1%.
When we break out channel satisfaction for bots by age group, we see that satisfaction is actually lowest in the US—the most satisfied market for bank bots overall—among the oldest (65+) and youngest (18–24) customers. That is likely because younger customers have higher expectations of intuitive, human-like bots, as they might use in other verticals whereas older customers are likely more suspicious of automated interactions generally.
When we ask bank customers (globally), which tasks they prefer chatbots to undertake, the overwhelming majority of users chose to not rank any task at all—only a very small minority of customers ranked any task first. This confirms bots today are not perceived as a premium touchpoint.

Reasons to Buy

  • Identify key players within the conversational platforms banking value chain.
  • Understand key trends within the conversational platforms in banking theme.
  • Learn about the key players operating in this space.


  • Executive Summary
  • Players
    • Table Figure 1: The key players in the conversational platforms in banking theme
  • Thematic Briefing
    • Table Figure 2: Virtual assistants are now part of everyday life, and they are getting more sophisticated
    • Smart speakers and automated home solutions are increasingly popular
    • Wearable tech will help increase engagement with conversational platforms
    • Financial services bots
      • Payments
      • Retail banking
      • Wealth management
  • Trends
    • Technology trends
      • Table Technology trends
    • Macroeconomic trends
      • Table Macroeconomic trends
    • Regulatory trends
      • Table Regulatory trends
  • Industry Analysis
    • Using chatbots in a focused way is more likely to drive satisfaction
      • Providers must set service expectations with appropriate escalation procedures and handoffs
      • Consumers in the US are most satisfied with chatbots
        • Table Figure 3: Most customers are satisfied with bots with US customers most satisfied
      • Satisfaction with chatbots is lowest among banks' youngest and oldest customers
        • Table Figure 4: Banks' youngest and oldest customers are typically least satisfied with bank bots
        • Table Figure 5: Chatbots are not a priority channel for the majority of customers most of the time
        • Table Figure 6: Branches are the preferred channel for financial advice, but many other channels matter
    • Delivering chatbots means competing for new talent
      • Table Figure 7: Amazon is the leading firm hiring in chatbots in FS in 2022 in the last three months
    • Mergers and acquisitions
      • Table Mergers and acquisitions
    • Timeline
      • Table Figure 8: The conversational platforms in banking story
  • Value Chain
    • Table Figure 9: The AI value chain
    • Table Figure 10: The financial services value chain
    • Lead generation
      • Application/onboarding
      • Outbound campaign bots
    • Customer support
      • Account management and notifications
      • Security
    • Advice
      • Product selection
    • Post-sales support
  • Companies
    • Financial services providers
      • Table Financial services providers
    • Technology providers
      • Table Technology providers
  • Sector Scorecard
    • Retail banking sector scorecard
      • Who's who
        • Table Figure 11: Who does what in the retail banking space?
      • Thematic screen
        • Table Figure 12: Thematic screen
  • Further Reading
    • GlobalData reports
      • Table GlobalData reports
  • Our thematic research methodology
    • Table Figure 13: Our five-step approach for generating a sector scorecard
  • About GlobalData
  • Contact Us

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