Most importantly, they rely on accurate and truthful information, making banking services more accessible, personalized, and efficient. This is the first in a series of articles about this revolutionary technology. Let’s begin!
Juan Carlos López
Co-founder & CPO of Coinscrap Finance
What is conversational AI?
Conversational artificial intelligence is a technology that allows machines to interact with people fluently, using natural language processing (NLP), machine learning (ML), and neural networks.
In banking, solutions called “agents” or “virtual assistants” are designed to answer frequently asked questions, assist with transactions, detect fraud, and provide financial advice tailored to each customer.
These tools can interpret the context of a conversation, learn from experience, and improve their accuracy with each interaction. This strengthens the relationship between a person and their bank, ensuring it lasts over time.
5 benefits of conversational AI in banking
24/7 customer support
Does your customer need to know how much they’re spending on dining out? With this technology, they can do so and access any banking service they need. This not only improves satisfaction but also prevents the frustration of having to wait until the next business day to resolve an issue.
Operational efficiency and resource optimization
Instead of having to go to the FAQ section, the user can naturally chat with a virtual agent trained to provide the most appropriate response. This allows human employees to focus on more complex cases that truly require their intervention, improving the overall quality of service.
Personalized experience
Each customer has different needs, and conversational AI can analyze historical financial data to display tailored recommendations. For example, a person asking, “How much have I saved in February?” will receive a response from the virtual agent showing the exact amount, along with an analysis of their savings ability and a portfolio of savings and investment products the bank offers to grow their money.
Security and fraud protection
AI not only speeds up inquiries but also protects bank accounts. By analyzing behavioral patterns, systems can detect suspicious transactions and alert the user before fraud occurs. According to the latest EY/IIF Global Bank Risk Management Survey, security breaches are the top priority for CROs.
Cost reduction
Implementing conversational AI significantly reduces customer service department costs. It limits the need for personnel for basic tasks and improves internal process efficiency. This allows banks to offer better service while spending much less.
Use cases of conversational AI in banking
One of the most promising applications of this technology is inquiry resolution. Whether it’s a bank employee or a person accessing their online banking, everyone can ask questions to the institution’s database:
- What’s my average monthly grocery spending?
- What was the cheapest flight I bought?
- Am I eligible for a loan or mortgage based on my income?
These questions, which previously required phone calls or in-person visits, are now resolved in seconds, improving the experience for both customers and employees.
Beyond answering questions, AI facilitates transactions without the need to visit a branch. Virtual assistants enable transfers between accounts, bill and credit card payments, and even the setup of alerts to monitor expenses and deposits, putting control back in the user’s hands.
If your institution is not using AI…
… you might be falling behind.
Check out its adoption in Mexico!
Another key benefit is personalized financial advice. A person who frequently dines at restaurants could receive gastro recommendations if their online banking offers a cashback program. Thanks to agreements between merchants and banks, users receive suggestions to recover a percentage of their spending at participating establishments.
This makes choosing easier!
Challenges in implementing conversational AI
Despite all these benefits, banks need to overcome certain challenges to effectively implement conversational AI:
- Protection of personal data: It is essential to ensure the security and privacy of customers’ financial information through strict regulations.
- Regulatory compliance: Each country has specific regulations for using AI in financial services, requiring constant adaptation from banks.
- Accuracy in responses: AI needs continuous training to avoid errors in language interpretation and ensure precise answers.
- Integration with existing systems: For a seamless experience, virtual assistants must efficiently connect with legacy core banking systems.
Where is AI in finance heading?
The future of banking will be marked by increasingly advanced and personalized virtual assistants. AI is expected to anticipate users’ financial needs and offer proactive advice. Imagine your virtual assistant notifying you before an automatic payment causes an overdraft or suggesting saving for a specific goal based on your income and expenses.
The reality is that technology is redefining the banking industry, making customers’ lives easier and optimizing financial institutions’ operations. Accessibility, efficiency, and security are skyrocketing—and so is the banking business.
Do you want to learn more about how to apply it to your bank? Follow me on LinkedIn to not miss the next part of this article.
About the Autor
Juan Carlos López Díaz is Chief Product Officer and co-founder of Coinscrap Finance. In 2016, together with David Conde and Óscar Barba, he created Txstockdata and Coinscrap Finance. After the tremendous success achieved, the business pivoted towards B2B, in partnership with EVO Banco and its “Smart Piggy Bank.” As a developer, he has over 8 years of experience leading major projects.
Along with his team, he is capable of creating the best tools for the financial world. From the product department, Juan Carlos has delivered projects for major companies in the sector: Evo Banco, Santander, Caser, Mapfre, and Bankia. He holds a degree in Electrical Engineering from the Central University of Venezuela and an iOS App Development certification from U.N.E.D and U.C.A.M.
