In our analysis of the customer retention strategies that have been most successful, a common factor is the user experience, be it by way of seamless access to a bank's various services or the way a bank is able to recognise and react to the needs of the consumer.
Such customer experiences are made possible with the advances in AI and machine learning technology as well as the abundant digital data being generated every day.
While banks in the last decade have been moving to a digital banking model, the next decade is likely to be focused on providing customers with an interactive and intuitive experience which is embodied in the emerging concept called Conversational Banking.
By definition, conversational banking is a bi-directional interface between a customer and a bank, where a conversation can be initiated by either participant through a voice, text or visual interface. While the responses given by the bank are machine-generated, responses can be delegated to bank staff where necessary to gently handle more difficult or sensitive conversations.
Conversational interfaces offer a host of benefits over typical app capabilities and features. This is to be expected of a progressive, customer-centric innovation.
The principal differentiator between conversational interfaces and apps is their usability, offering a more user-friendly and consistent experience across all interfaces.
In contrast, apps vary enormously in look and feel, each featuring their own distinct style of menu and method of navigation. When interacting with a conversational interface, the customer benefits from no longer facing the limitations and restrictions of the app provider’s terminology.
Instead, the customer can engage with the interface using their own vernacular. A successful example of this is Caixa Bank, which developed a conversational banking interface for its customers in partnership with IBM to develop a cognitive system based on IBM’s Watson that is able to understand Spanish voice.
A well-developed conversational interface should have the ability to recognise and process the users' request no matter how it is phrased. The ease of use of a conversational interface becomes apparent before the user has even initiated a conversation as these interfaces do not require installation.
Conversational interfaces are configured to work with a platform such as Facebook Messenger, enabling the customer to immediately connect with the service. No installation requirements also save the customer from any additional time spent on frequent app updates, as well as precious memory space on their mobile device.
As digital banking becomes the norm rather than the exception, a conversational AI-enabled banking experience will be the key differentiator for banks in winning and retaining their customers.