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Although banking and financial services have changed a lot in recent years, there’s one thing that still holds true…
People like the personal touch.
Especially when it comes to banking and financial services.
However, in the age of fintech, this doesn’t necessarily mean face-to-face conversations. It’s more likely that people will text chat through an app rather than in a bank branch, office, or phone call.
This is where chat features in banking apps can really shine.
Blending the efficiency of mobile technology with in-app chat lets you deliver personalized service at scale. Combining AI chatbots with human–to-human chat in your mobile fintech app leads to more engagement, customer satisfaction, and higher retention rates.
What is Conversational Banking?
Conversational banking is basically the integration of chat functionalities into banking apps to facilitate interactions.
AI can be used in a chatbot to understand and respond to user queries in natural language. For example, instead of clicking through a static menu, customers can type "How much did I spend on groceries last month?" and the system understands and fetches the answer. It's all about making banking as intuitive and natural as chatting with a friend.
Conversational banking isn't limited to AI-driven chatbots. It can also facilitate human-to-human interaction, like enabling a customer to message a bank representative directly within an in-app chat window.
The whole concept of conversational banking is using technology to make interactions as smooth and personal as possible, whether automated or with a real person.
Offering both options is key because while AI is great for efficiency and handling common queries, sometimes customers need to feel heard and understood on a more complex issue, and that's where human touch comes into play.
Additionally, research has shown that 86% of people prefer talking to a real human than a chatbot, especially when there is an element of trust involved, such as dealing with finances.
The conversational banking approach really resonates with users as they love the convenience and personalized touch it adds to their banking experience.
If you’re thinking about adopting a conversational banking approach for your app, the best thing is you can easily and quickly add chat features these days with a chat API, such as Sceyt.
Enhancing User Experience (UX)
Conversational banking chat features in a banking app can be a real UX booster. They simplify banking tasks by cutting down the steps a user needs to take.
Need to transfer money? Just type it in the chat.
Want to check your last transactions? Ask away.
It's all about reducing friction.
Conversational AI takes it up a notch by personalizing interactions. It can learn a user's habits, offer insights based on spending, and even predict future queries. This kind of tailored experience makes users feel understood, which is huge for satisfaction and trust. It's like having a banker who knows you well, available 24/7, right in your pocket.
It can do more than just understand commands. It offers context and personalized service. It can notify users about unusual spending or suggest ways to save, making the banking experience proactive rather than reactive. It's a game changer for customer engagement.
Think about the typical tasks people do on a banking app – checking balances, transferring funds, setting up payments. A chat interface streamlines all that. Instead of navigating through menus, users can just type or speak what they want to do.
For example, think about the security concerns that come with financial operations. You can integrate a chat feature where customers can immediately report suspicious activity just by typing out their concerns, such as "I didn’t authorize that $100 transaction." This quick alert system through chat gives users peace of mind but also significantly reduces the fraud response time.
The convenience of reporting issues in real-time, without the hassle of call centers or email, can truly enhance your users' trust and satisfaction.
Ensuring Security and Compliance
Providing conversational banking is great for UX, but most users will have concerns around security, especially if large sums of money are involved.
Every time you add a new feature, such as in-app chat, it's essential to consider security. End-to-end encryption is vital, as it's like putting your users' conversations in a vault that can only be opened by a key held by the communicating devices.
Secure authentication is just as important. You want to make sure that the person on the other end is who they say they are. This could mean integrating multi-factor authentication, using biometrics, or other robust verification methods.
There are also regulations to consider. The General Data Protection Regulation (GDPR) in the EU, for example, dictates how personal data should be handled and protected. The Payment Services Directive 2 (PSD2) pushes for stronger security for online payments. Therefore, you have to ensure your app complies with these regulations to the letter. It's a complex task, but necessary. It means auditing your code, working with legal teams, and sometimes redesigning workflows to ensure compliance.
Using well-designed and secure APIs can help to ensure compliance. For instance, Sceyt has built-in TLS(SSL) encryption for in-transit data and AES encryption at-rest. It is also fully GDPR compliant.
Scalability and Performance
When we talk about scalability in the context of a conversational banking app, we're envisioning a future where the user base might suddenly explode. You’ve got to build your systems to handle this influx smoothly. It’s like building a bridge – you don’t just account for the cars today, but for the potential traffic in ten years.
Sceyt, for example, uses a proprietary binary messaging protocol that's designed to be low latency. This means messages are sent and received almost instantly, which is vital for banking where timing can be everything. It also allows millions of users in a single chat channel, without any additional fee.
You also need to ensure real-time updates across the user's devices and your transaction systems. When a user transfers money or checks their balance, the information should be accurate up to the second. Handling this efficiently, especially as you scale, requires a robust back-end infrastructure that can handle the load and a front-end that's responsive without lag. This ensures that users have a seamless experience, whether there are 100 or 100,000 or even millions of people online at the same time.
Real-Life Conversational Banking Examples
Here are some examples of fintech and banking apps that have adopted conversational banking:
- Cleo engages a modern audience with built-in conversational AI. It’s designed to resonate with millennials with engaging dialogue and offers financial guidance and analysis in an approachable manner. The main aim is to encourage financial literacy.
- Erica, Bank of America's virtual assistant, is both approachable and professional. It integrates with banking services seamlessly and assists users with transaction tracking and account management.
- Eno, from Capital One has advanced chat features such as proactive fraud alerts. It’s highly secure, building trust in digital banking services.
Conclusion
Conversational banking is shaping the future of financial interactions.
It means that users no longer have to go through a maze of menus to get to what they want. Instead they get a simple, dialogue-driven experience, where a 'chat' can send a transaction, provide financial insights, or give info on spending patterns.
It's intuitive, instant, and incredibly personal.
And the beauty of it? It's not just for the techy people. Anyone who can use an app chat feature can get along with it. Conversational banking is accessible to everyone.
Integrating in-app chat into your financial services app is the first step to making conversational banking a reality.
Try Sceyt’s Low-Latency Chat API Today
If you want to see what Sceyt can do for you, check out our demo app or sign up for a free trial.
Dan Martin
Dan is a an experienced B2B tech writer with a background in engineering.
He specializes in writing about IT, software, SaaS, and engineering.