Rapid Expansion of Bots in the BFSI Sector – Benefits, Opportunities, and Challenges

There’s an increased demand for transparency, customization, and speed. As a result, systems and processes that core financial institutions have relied on for long are changing.

Consider this; the traditional customer service function, in particular, is not nimble enough to address issues arising from multiple channels and increased customer churn rates. This leads to a high percentage of non-performing assets (NPAs), higher costs of operations, and more human intervention. Bot-based solutions have the potential to change this scenario drastically.

How? These bots can operate on voice and text commands and help:

• Schedule payments
• Instantly extract information regarding past transactions
• Route issues to human agents based on their complexity

Here’s a rundown of the benefits that financial institutions enjoy with the application of bots across functions:

Bots can provide customer support 24/7. This helps banks instantly respond to customers needing assistance outside traditional business hours.

Also, these AI-powered virtual assistants can be programmed to understand the customer’s needs and provide them with the information or assistance they need in a way that is tailored to their individual preferences. For example, a chatbot can be programmed to remember the customer’s past transactions and use this information to provide personalized guidance.

Bots can automate many redundant tasks, such as answering basic customer questions, processing transactions, and routing complex issues. This can free up employees to focus on more strategic work and help improve the concerned department’s overall efficiency.

For example, a bot can help conduct regular health checks on critical applications and alert an employee if there is a problem.

Bots can be used to help detect and prevent fraud. The AI-powered bots can monitor transactions for signs of fraud or security breaches and can identify and block suspicious behavior. They can also help protect the company’s data by encrypting it and using firewalls and other security measures.

The BFSI Sector is abuzz with opportunities offered by bots.

According to Juniper Research, chatbots will help banks save $7.3 billion globally by 2023. Chatbots offer myriad opportunities in the BFSI sector, transforming customer support. With their natural language processing capability, they can provide personalized customer support, answer inquiries about accounts, transactions, or loans, and efficiently resolve issues.

According to a study, more than 111 million Americans use voice-activated personal assistants at least once a month.

Text/speech assistants also help with banking and financial tasks as they can facilitate easy payments, fund transfers, and balance inquiries through voice commands. The inclusion of voice recognition ensures a seamless experience, empowering customers to stay informed and in control of their finances.

Juniper had previously projected that the banking industry would see a 90% success rate in bot interactions by 2022. Going by the pervasiveness of virtual agents across the banking ecosystem, this number would be even higher today. For example, bots can help automate communication across the board by:

• Sending personalized reminders for bill payments and loan installments
• Providing updates on policy changes or new offerings to instill trust in customers
• Drive targeted promotions based on preferences and transaction history to increase customer engagement and loyalty

Ensuring the security and privacy of customer data stands as a primary hurdle. Banks must guarantee a secure chat interface and protect sensitive data from unauthorized access or disclosure.

Moreover, compliance with stringent regulations is critical. The utilization of AI may raise concerns regarding transparency. As generative AI becomes a key enabler of bot-led interactions, regulators will be even more stringent in ensuring that the communication is unbiased, reasonable, and transparent.

Additionally, establishing effective human-machine collaboration and gaining customer trust remains complex. Training AI models to comprehend industry-specific language and terminologies requires relevant data and seamless integration with existing systems. This is critical for ensuring that AI can respond accurately and relevant to user inquiries.

Emergys is a data science company that helps financial institutions in their digital transformation journey. We provide end-to-end data science services, from data collection and preparation to model building and deployment.

We also specialize in conversational AI, and we can help you develop chatbots and other conversational AI applications that can improve the customer experience and automate business processes. Our advanced conversational AI solutions can:

• Decrease customer response time by providing 24/7 customer support and issue resolution.
• Lower the cost of customer service function by minimizing operational redundancy and freeing up human resources for strategic initiatives.
• Automate critical tasks and provide real-time operational information for faster turnaround times, better decision-making, and reduced errors.

We have a team of experienced data scientists and conversational AI engineers who can help you develop and deploy secure, accurate, and user-friendly bots. Contact us to learn more.