Bots in the BFSI Sector: Powering the Future of Banking and Financial Automation

The BFSI space is booming with bots, because they want to provide an individualized experience to their customers. Digital transactions are always evolving, and, with the rise of the use and availability of data, banks have an opportunity to gain insights into consumer behavior like never before. And are using that insight to improve service efficiency, improve customer experience, and drive business growth.

That brings ultra-expressive and efficient bots into the equation. Recent findings indicate that the BFSI chatbot market will reach USD 5343 million by 2030, growing at a CAGR of 27.5%. That is promising when you consider all the great advantages of implementing bots in BFSI sector and to change the way people receive financial services.

Bots Needed in BFSI Sector: Why are they needed?

There is a growing need for transparency, customization and speed. Systems and processes that have been relied upon by core financial institutions for quite some time are now being transformed. With the traditional customer service function, for example, it is simply not agile enough to handle the complications of managing arising from multiple channels combined with increased customer churn and a high percentage of non-performing assets (NPAs), increased operating costs and greater human intervention. Bot-based solutions can completely transform this situation.

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

Benefits of Implementing Bots in the BFSI Sector

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

Improved Customer Experience

Bots can provide customer support 24/7. This benefit allows banks to quickly attend to customers seeking assistance outside of business hours. In addition, these virtual assistants, powered by AI, can be programmed to discern the customer’s needs and offer information or assistance that caters to their individual needs. For instance, a chatbot can be programmed to recall the customer’s previous transactions in order to provide personalized recommendations.

Reduced Manual Effort

Bots can automate many repetitive tasks including answering basic customer inquiries, processing transactions, and routing more complex issues. This release of employees can allow for a focus on more strategic work and help improve overall efficiency within the department concerned. For example, a bot can assist in performing regular health checks on key applications and then alert an employee if there is a problem.

Enhanced Security

Bots can assist in discovering and preventing fraud. The AI-powered bots can oversee transactions for signs of fraud and security breaches, and can still detect and block suspicious behavior, including identity theft. The bots can also help safeguard and protect the company data through encryption, firewalls, and other security measures.

Opportunities for Using Bots in the BFSI Sector

The BFSI Sector is abuzz with opportunities offered by bots.

Chatbots

As reported by Juniper Research, chatbots will allow banks to reduce costs of $7.3 billion globally by 2023. In the BFSI sector, chatbots bring with them a number of possibilities and are changing the customer service landscape. From natural language processing, chatbots can deliver personalized customer service, answer questions about accounts, transactions or loans, and effectively solving problems.

Text/Speech Assistants

According to a study, over 153 million Americans use voice-activated personal assistants monthly, and this number is expected to exceed 157 million by 2026.

Text and speech assistants also help with banking and finance tasks since they allow for simple payments, fund transfers, and balance checks through voice commands. Voice recognition allows for a seamless experience, providing customers with peace of mind and the knowledge to stay informed and in control of their finances.

Communication Automation

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

Challenges in Adopting Bots in the BFSI Sector

Communicating and securing customer data is a major challenge. Banks must provide secure interaction channels to chat with their customers, and protect customer data from unauthorized access or public disclosure.

Furthermore, with regulations becoming stricter, there are many requirements that need to be in place. There is also an issue of transparency for the AI, as generative AI continues to push towards having a bot-led experience – the regulators will certainly be looking at monitoring purpose bias, reasonableness, and transparency of the communication.

Finally, communicating effectively and getting customer buy-in is challenging when working with machines and AI. Training an AI model requires access to data that captures industry specific language and terminology, and to be able to integrate that data seamlessly into existing systems, to ensure AI is producing accurate and relevant answers to users queries.

Tap Into the Power of Bots with Emergys

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.