Conversational banking - key things you need to know

By : Glenn A. Tom

March 06, 2018 01:00 PM

One of the fastest-growing trends in the consumer financial services sector right now is known as 'conversational banking'. Many see this as a key step in a new era in banking customer service that allows users to chat with their bank wherever and whenever they want, and get answers to their queries whether they are speaking to a human or a chatbot. But what will the future for this technology hold in the financial services industry?


Defining conversational banking
For many, the concept of conversational banking goes hand-in-hand with technology such as chatbots. This is the ability to hold a natural conversation with an AI robot, where users do not have to worry about sticking within a rigid, predefined set of commands - whether this is on the phone or, more often, though a text-based SMS or instant messaging interface.


These tools have many benefits for financial institutions and customers. From the customer point of view, it means they can get much faster answers to simple questions without having to wait for a human adviser to become available, while for the bank, it can be a more cost-effective way of keeping in touch with consumers.


However, these tools could just be the start of a new era of banking that allows users to interact with technology in much the same way as they would with an in-branch bank teller, as recent developments have opened new opportunities for these services to reach people directly in their homes.


Amazon Alexa, Google Home and more
For many people, their first practical experience of a conversational interface is likely with one of the growing number of home virtual assistants that are now available. While Amazon's Echo device and its built-in Alexa assistant is the market leader, Google Home and Apple's HomePod have been quick to follow its lead, illustrating just how much potential the tech industry believes there is in this space.


While initial applications for this technology have tended to revolve around basic interactions such as setting calendar reminders, playing music and calling up news and weather, there's no reason why they can't also be used as a primary interface for conversational banking.


For instance, NCR recently unveiled a new skill for Amazon Alexa, working with Maine-based Town and Country FCU, that will allow users to securely manage their account information through Alexa-enabled devices.


This includes using simple voice commands such as 'Alexa, check my balance' to get key account information in an instant. This speeds up and simplifies everyday processes, being much faster than having to open an app and tap through to the right option. It's more intuitive and natural to use and helps people take greater control of their finances without interrupting their day.


Making these efforts a success
But what will banks have to do in order to make these elements a success? While chatbots are being increasingly used in contact centers and web apps to help users quickly, translating these to the home environment may need a greater focus on issues such as security and user authentication.


This is in addition to requirements such as natural language processing (NLP) and artificial intelligence (AI) technologies that are necessary to interpret requests and convert them into something the back-end infrastructure of the bank can understand.


While conversational banking is still in its infancy, general AI and NLP solutions have come a long way in the last few years and now have the power needed to support more complex interactions. And as more homes become familiar with Amazon Alexa and its competitors, being able to interact with banks in a more natural way will become an essential service for financial providers to offer.

Glenn A. Tom

Senior Director of Global Solutions Marketing

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Glenn is responsible for leading global marketing efforts for all of the division's consumer- and FI-facing solutions, including digital banking, branch, ATM hardware and software, channel management, payments & transaction processing and enterprise fraud & security. Prior to joining NCR and Digital Insight in 2008, he held marketing and general management positions at Intuit, Morgan Stanley, Citibank and American Express. Glenn has a BA in Liberal Arts from Claremont McKenna College, a BS in Industrial Engineering from USC and an MBA from The Wharton School, University of Pennsylvania.