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Conversational banking: The complete guide for 2022

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Did you know that the banking industry has been around since the days of Ancient Rome? Financial services technology has come a long way since then. Today, the average customer enjoys more convenience at their fingertips than any Roman emperor ever did. So why should banking customer service remain stuck in ancient times?

The banking industry has made great strides in making services virtually accessible from anywhere in the world. In spite of all that innovation, customer experience still has room to improve. For example, clients can access their accounts and initiate transactions instantly, but the human interaction with a bank teller has been replaced with searching through vague FAQs and navigating menu after menu before waiting on-hold for 20 minutes to speak with someone in a call center… somewhere.

Now, personalization and digital convenience don’t need to be mutually exclusive thanks to conversational banking solutions that are transforming the customer experience in financial services.

In this guide, we’ll explain how conversational banking works and how using it to enhance customer engagements can create exceptional new banking experiences that earn life-long customers. 

You can read on to find out why nearly 80% of companies are investing in conversational customer engagement. Or check our table of contents to jump to a specific section below.  

What is conversational banking?

Conversational banking is a form of digital banking that empowers banks and customers to interact in real-time through text messaging, voice, mobile apps, and websites for an unprecedented level of service.

With better communication, customers receive convenience and a more rewarding experience while banks are able to learn more about their customers’ needs to offer personalized solutions.

Illustration shows integrated network of conversational banking channels and customer benefits

CPaaS, short for Communications Platform as a Service, and conversational platforms provide the omnichannel communications solutions that make conversational banking possible.

With their integrated communication channels and artificial intelligence (AI) capabilities, these technologies let banks track, personalize, and learn from their customer interactions to provide tailored support and a seamless experience at every step across multiple channels.

From the customer’s perspective, they have a lot more options to address their financial needs and receive quick, one-on-one support from just about anywhere. Using any mobile device, they can easily text, call, or video chat with virtual and live human agents to get the relevant advice they need at any time. 

Best of all? Customers never need to go to the bank in person…unless they want to!

Benefits of conversational banking

Banking may be the most striking example of how technology has transformed customer convenience in the 21st century. Transactions that once took days or weeks now can be done instantly with just a click. 

From the same screen you’re using to read this, you can check your credit score, transfer funds from a checking account to savings, and pay your bills in the same amount of time it takes to finish this sentence.

How customers benefit from unparalleled accessibility

Customers already have great self-service options in digital banking. Expanding digital banking to new channels and giving customers express lanes to personalized customer service takes convenience to the next level.

As we all know, time is money. With conversational banking, customers never have to waste time visiting the bank when they have a financial need. 

Instead, tools like chatbots, voice assistants, live chat, and mobile apps provide customers:

  • Shorter wait times to connect with live agents

  • Tailored experiences 

  • High-quality service

  • Multilingual options

  • Faster resolution for common issues

How banks benefit from omnichannel communication

For banks, the benefits are clear in terms of dollars and cents. Investing in smart, scalable customer engagement solutions to enable conversational banking pays off in many ways, from the moment of implementation and well into the future.

Increase revenue and customer lifetime value (CLV)

Customers with more options to interact with their banks through conversational channels including SMS, online chat, and social messaging apps, not only get more value but also are likely to engage more frequently. These customers naturally enter into prosperous long-term relationships with their banks. 

Put simply, rewarding customers with the convenience and utility of two-way omnichannel communications pays dividends to financial institutions through:

  • Improvement in customer satisfaction
  • Higher net promoter score (NPS)
  • Reduction in customer churn rates
  • Improvement in conversion rates
  • Greater customer loyalty and trust

Keeping satisfied customers around, of course, means you’ll spend less money to attract and win new ones. And you’ll get additional opportunities to drive revenue with proactive customer engagements that get loyal customers excited about investing even more with you.

This isn’t a little bump in revenue we’re talking about – it’s scaled revenue growth over time, along with higher CLV! 

Lower operating costs

Right now, you might be asking how it’s possible to provide amazing service and support to customers on more channels without increasing costs. The answer lies in conversational banking solutions that help your organization work smarter, not harder. 

From customer support chatbots and workflow orchestration to mobile account verification and text notifications, these communications technologies do more than improve the experience on the customer’s end – they help banks cut costs by:

  • Better allocating people resources. AI chatbots can answer common questions or lead customers to the right self-serve help content for a majority of support queries, freeing up live agents to respond faster to more complex issues.

  • Giving support representatives more information to resolve customer issues faster. With a full history of interactions, no call ever has to start from scratch.

  • Improving account access and security. Mobile verification solutions not only help remove friction for customers trying to access their financial accounts remotely and minimize the need for customer support, but also keep customers’ sensitive data secure.

  • Reducing fraud. Two-factor SMS authentication and mobile text alerts protect you and your customers from fraud, notifying them immediately of suspicious activity so they can take action, anywhere, anytime.

Accelerate innovation

In addition to building deeper relationships with customers that support organic business growth, conversational banking technologies can also open the doors to new data that inspires rapid innovation.

Consider this example. If you’re like us, you love texting but your email inbox may be gathering dust. Would you be more likely to respond to an SMS from your bank than an email?

Customers are more likely to respond when banks make communication as convenient, relevant, and accessible as possible. And with more customer interactions, financial institutions can analyze a lot more data to:

  • Better understand customers’ financial habits, goals, and preferences
  • Deliver the most relevant advice that builds lasting, trusting relationships
  • Study customers’ experiences and behaviors en masse
  • Develop new products and services that meet emerging needs of customers

Ultimately, the benefit of conversational banking is twofold:

  1. Satisfied customers stick around, engage more, and spend more 
  2. Banks operate more efficiently and spend less while growing new and existing revenue streams 

It’s a win-win strategy that can deliver a big ROI for financial services companies.

Conversational banking use cases in financial services

So far, we’ve spoken plenty about the wonders of conversational banking. Instead of taking our word for it, take a look at these real-life examples that show how financial institutions have adapted to meet their customers’ evolving needs.

From banking institution to trusted tech innovator

FirstBank started out in the 1960s as a traditional in-person bank. In the new millennium, their challenge was keeping customers up to date and engaged.

They started using Sinch SMS to send personalized text notifications and alerts to their customers.

The results speak for themselves:

  • FirstBank now sends its customers nearly 3.5 million text and email alerts per month, including:
    • Account, credit, and daily balances
    • Projected balances
    • Deposits
    • Foreign transactions
    • Payments due
    • Personal information changes
    • Withdrawals and purchases
    • Statement availability
    • Security alerts for suspicious card activity
  • 60% of their online banking customers are signed up to receive monthly alerts 

Putting the cherry on top of easier banking, FirstBank also uses SMS to reward its customers with freebies, including lunches, treats, and services. 

Revolutionary customer service you can only get with a chatbot

mybo conversation

If you ask any Belgian citizen which bank they use, there’s a 1 in 3 chance they’ll say Belfius. As one of the most trusted integrated banks in the country, Belfius offers a wide range of insurance products, in addition to its core banking business, and serves over 1.4 million customers through its mobile app.

I think we can all agree that filing an insurance claim isn’t anyone’s idea of a good time – and if you’re filing one, you’ve already experienced at least one misfortune. That’s why Belfius wanted to find a way to simplify its insurance claims process while still giving customers caring, personalized support.

How’d they do it? With their AI chatbot: myBo.

Using Chatlayer by Sinch, Belfius integrated their chatbot into their banking app and backend systems to provide clients with a quick and effortless claims process made just for them.

Here are some of the results:

  • Over 2,000 claims are processed monthly
  • Roughly 600 working hours are saved for the customer care team monthly
  • Conversions increased 87.5% compared to traditional insurance claim forms

Of course, Belfius didn’t stop with insurance claims. They also developed a personalized AI chatbot that helps their clients with any questions related to daily banking.

With a few transformative integrations, Belfius’ fully automated process now provides clients with 24/7 availability and answers 5,000 questions monthly.

Client onboarding transformed for the digital age

Just like any new relationship, it’s important to start off on the right foot with new banking customers and really get to know one another.

Innovative financial services companies are discovering that offering digital onboarding with a personal touch can help customers get the most from their new bank. And by delivering memorable, engaging customer experiences from day one, they can also make a big impact on CLV at scale. 

Traditionally, banks and financial institutions were limited to face-to-face interactions by the number of new clients they could see in person at a branch location, but with in-app video calling they can now meet with customers anywhere in the world – as long as they have a good internet connection. 

Using secure in-app video calling banks can:

  • Provide real-time assistance to new customers and answer questions one-on-one
  • Offer live product demos to engage customers in the onboarding process
  • Learn more about their customers, and their individual needs and preferences

As an example, let’s look at Barclays — one of the most established multinational banks in the world. While “traditional banking” is in their DNA, they’ve adapted to become a conversational bank. 

Barclays developed their Video Banking service to give customers face-to-face access to their bank representatives from anywhere in the world. Customers can speak via video with a banker on a smartphone, tablet, laptop, or desktop at their complete convenience.

These secure, real-time digital connections lay the foundation for long-term relationships and improve conversion rates throughout the customer lifecycle.

Illustration shows how automation can help mobile customer support

Integrating secure messaging during and after new customer onboarding also sets the standard for unparalleled convenience and protected communications. 

Global banks are now using Sinch’s WhatsApp Business API to extend the banking experience to even more real-time conversation channels. With more than 2 billion subscribers, WhatsApp is the most used messaging app in the world. WhatsApp Business integrations and its encrypted, rich messaging features make it ideal for:

  • Providing global customer support to banking customers globally at any time
  • Delivering real-time updates with sensitive information like account balances and recent transactions
  • Authorizing account transactions, reporting a lost or stolen card, verifying login activity, and more

One Sinch customer that expanded conversational banking to WhatsApp reduced their customer support costs by 40%! 

If you’re curious about how you can develop a conversational banking experience from scratch, keep reading – we show you how below.

How to develop a conversational banking experience

Illustration details four important ways banks can offer conversational banking

Now that you’ve seen conversational banking in action, here are the steps you can take (and tools you can use) to transform your customer’s experiences.

Understand your customer journey and add value

Conversational banking is all about convenience. In order to provide the best customer experience, it’s important to look at the customer’s entire journey.

To find where you can add value for your customers, you can start by:

  • Identifying all customer touchpoints with your business
  • Anticipating when and where customers are most likely to need support
  • Build response guidelines that create a consistent experience for customers across channels

Once you’ve done your research and planning, you can make an informed choice about the right conversational channels for your customer’s needs and map out the framework for your omnichannel engagement strategy. 

Open customer support express lanes with AI

Just like stores that offer self-checkout and express lanes to minimize wait times and get customers on their way quickly, financial services businesses can use AI and automation to do the same for their digital customers!

With more communication channels available and conversational chatbots to assist, banking customers can get the personalized support and answers they need much faster than if their only options were to call your 1-800 number, wait for a response to an email, or go into a local branch. 

In almost any channel, intelligent conversational bots can help customers with common questions and requests, either directing them to self-serve resources or answering them in-chat.

If a customer needs support with something more complex or needs to be connected to a specific department or person, AI can understand and make that happen in a flash.

Plus, information from the customer’s profile, including their full engagement history, ensures every interaction is quick and gratifying – whether it’s with a bot, a human, or both. 

Put simply, this is how you scale fast, friendly service with a personal touch and really add value for your customers.

Check out these transformational Sinch solutions that make it easy to create unbeatable conversational banking experiences:

Protect customers’ personal information

It goes without saying that trust is critical when dealing with people’s finances. Customers are happier knowing that their money and personal data are safe, and they want the ability to take action if there’s even a small chance that it’s not.

Using secure mobile messaging and mobile identity verification, banks can earn and build trust with customers by:

  • Instantly alerting customers of potential account breaches, fraud, and other suspicious activity
  • Offering options to take action immediately in-message
  • Giving customers quick routes to communicate with human agents when something seems wrong

With conversational banking solutions in place, if a customer is alerted to fraud you’ll be able to immediately support them by securing their account and information, and address any concerns they have when they need your reassurance the most. 

This level of responsiveness and communication is critical for keeping your customers’ trust and building relationships that stand the test of time.

Seek customer feedback and monitor your progress across channels

You’ve done the heavy lifting by developing the cornerstones of your conversational banking experience. To build on that foundation:

  • Follow up with customer satisfaction (CSAT) surveys to learn more about their experiences (pro tip: try using your new conversational channels to get feedback!)
  • See where you can resolve customer issues more efficiently and identify areas to improve
  • Reward your customers for their engagement with freebies or discounts 

Finally, you’ll want to measure the impact of your hard work. You can see how frequently customers are engaging with your conversational platforms by looking at:

  • Number of inbound queries
  • Conversion rates

You can also measure the impact of your conversational channels by analyzing:

  • Average resolution time
  • Time saved for contact center agents

When it’s all said and done, we’re confident the results will show you’ve delighted your customers while strengthening your organization’s bottom line.

It’s time to talk about the technology

The key to implementing conversational banking is choosing the right communications technologies and AI solutions to make the magic happen, and we’ve touched on a few of them already. 

But with every digital transformation as unique as an individual customer’s journey, there’s not exactly a one-size-fits-all CX tech stack. 

There are, however, two main types of customer engagement tools that will give you everything you need to deliver an effective conversational banking experience, which are worth getting to know:

  1. CPaaS: A Communications Platform as a Service offers omnichannel customer engagement solutions that enable secure, two-way messaging, email, voice, and video communications. When integrated with other systems, CPaaS technologies can simplify and automate a wide range of customer engagement workflows across channels while providing a full history of interactions to help businesses deliver a customer experience like no other.

Get an overview of the CPaaS market, advice for buyers, and an in-depth rundown of market-leader Sinch in IDC’s 2021 CPaaS MarketScape Report excerpt → Download it free here.

  1. Conversational AI: You may think of bots when you hear conversational AI, but it’s more than just chatbots or voice bots – this technology, also called conversational automation, helps businesses seamlessly transition customer conversations from bot to human and across channels, assisting customers in the most efficient ways possible.

We’re proud to say Sinch was included in the first-ever 2022 Gartner® Magic Quadrant™ for Enterprise Conversational AI Platforms. Learn more about Conversational AI Platforms → Download the full Gartner report here.