Humans x chatbots: How this winning combination best serves banks

The customer journey in banking has drastically changed in recent years. The days of visiting a physical branch to access banking services and resolve queries are long gone. Instead, these face-to-face interactions have largely been replaced with online banking and digital interactions through various channels, including chatbots.

Often popping up on a homepage, chatbots use artificial intelligence (AI) and natural language processing (NLP) to deal with routine queries and respond to information requests in a conversational manner. Their value lies in their ability to conduct many conversations simultaneously at any time of the day or night, helping to improve customer service without increasing operational costs and headcount.

While chatbots are experiencing substantial growth across Europe—the global chatbot market is projected to reach $454.8 million by 2027, compared to just $40.9 million in 2018—the uptake in financial services has been slower than other industries.

Yet, in fact, chatbots offer many advantages to both customers and financial institutions by providing rapid, accessible, and efficient support. Financial institutions that have implemented chatbots are using them successfully to engage with customers and perform various simple functions, such as retrieving account balances, looking up recent transactions and assisting with money transfers.

Can bots bridge the generation gap?

However, at the heart of banking is the need to handle customers’ sensitive personal information, which means people are often wary of sharing these details with chatbots. In Germany, especially, the majority of customers feel more comfortable interacting with a human agent over the phone (seventy per cent) or in branch (sixty nine per cent) than they do using a chatbot, particularly when it comes to asking sensitive questions or resolving complex issues.

Similarly, in the UK, research carried out by NetApp revealed that for more complex or sensitive issues, the majority of customers would still prefer to talk to a human agent (seventy one per cent) and almost half (forty six per cent) would opt to go into their bank’s branch.

Different generations also feel more comfortable using certain communication channels. Baby Boomers (those aged over fifty five) grew up with bricks and mortar banks and face-to-face interactions. As such, they still feel more comfortable engaging with human agents than banking bots. In contrast, Millennials (twenty seven to forty two year olds) and Gen Z (eleven to twenty eight year olds) grew up with the internet, meaning digital interaction feels very normal to them.

While these younger generations are driving the move towards digital-first solutions in financial services, it would be inaccurate to say that Baby Boomers are being overlooked. One of the biggest pain points for customers, regardless of their generation, is waiting in a queue for their query to be resolved. Across the board, people demand convenient, rapid, and seamless banking experiences. According to the Zendesk’s CX Trends Report 2023, customers of all ages are open to using chatbots and AI if it means speedier resolution of their problems.

Human-like but not human

Alongside faster service, all generations demand a more personalised customer experience too. They want their interactions to resonate on a personal level and many believe chatbots and AI can enable this. Indeed, according to the Zendesk CX Trends Report 2023, seventy per cent of consumers who often interact with support believe the use of AI can lead to more tailored and effective customer support. Another sixty two per cent would be less inclined to use a company’s AI/chatbot if it failed to provide personalised information or responses.

However, it’s vital for financial service providers to use chatbots in the right way. If these bots happen to provide the wrong information to customers, especially in this industry, it will not only frustrate them but also likely break their trust. Customers want timely, straightforward answers, and if they struggle to get the response they need online, they want access to a human agent.

Customers are also very aware that chatbots are machines. While they might simulate human-like responses, people draw a line at chatbots mimicking human emotions, particularly empathy. While they agree that AI should recognise emotion and use it to improve their experience, our research found that customers want chatbots to automatically route them to human agents when strong emotions are expressed.

The best of both worlds

It’s all about finding the right balance between human agents and chatbots. While it’s important for people to feel comfortable using chatbots in financial settings, it’s crucial to have human agents easily accessible for more complex and sensitive queries. A chatbot’s strength lies in its ability to resolve a vast number of queries and tasks instantly, whereas humans have the emotional intelligence to understand complex emotions and offer a personalised and empathetic response to them.

The good news for financial service providers is that it’s possible to use AI and chatbots to determine intent and sentiment, then have the technology seamlessly connect customers to a human agent if and when needed. Eighty one per cent of consumers state that if they’re having trouble with AI customer service, having a human agent available is critical to maintaining trust with that business.

In our digital-first world–which is increasingly becoming AI-powered–customers are feeling more comfortable using chatbots. Indeed, many now expect businesses to offer AI-powered communication tools. Yet they also want the comfort of knowing they have access to that invaluable human touch when needed. The future of financial services is built on humans and chatbots working together to create a seamless, personalised experience for all.