Conversational AI in Financial Services: The Ultimate Guide

Conversational AI in financial services is transforming how consumers interact with advisors, banks, and investment companies worldwide. While AI might not be a new concept in the finance industry, conversational AI marks a significant step forward.

With this technology, financial advisors, and banking leaders can accomplish incredible things. They can deliver better, more personalized service and support across a range of channels, automate common tasks, and even increase revenue.

Around 81% of bankers already believe cutting-edge AI will be the key to their success in the years ahead. So, what does conversational AI for finance involve? How does it work? What are the benefits, and how do you get started?

The Rise of Conversational AI in banking and finance

Conversational AI is the technology that empowers computer programs and systems to simulate human-like discussions with users. Crucially, it’s not just another name for a “chatbot”. If you compare chatbot vs conversational AI technology in finance, you’ll notice some key differences.

Traditional chatbots, for instance, respond to queries using rule-based algorithms. Conversational AI, on the other hand, can actually understand what customers are saying, using natural language processing, machine learning, and speech recognition.

While AI bots in finance have been gathering momentum since the mid-2010s, most early solutions were pretty basic. They could send automated text messages based on pre-defined policies and rules, and even have two-way conversations with customers, but most companies struggled to design advanced solutions, due the investment cost required for development.

Now, however, the rise of generative AI, open-source models, and platforms for conversational AI has made conversational banking experiences more accessible.

You might even be familiar with some popular conversational AI tools created by banks. For instance, Erica, the bot created by the Bank of America, had managed more than 1 billion interactions with customers by 2022.

Applications for Conversational AI in Finance

So, how can companies use conversational AI in financial services? The opportunities are constantly evolving. Today’s leading companies are using AI tools for everything from automated finance SMS strategies, to improving customer service and gathering data.

Some of the biggest applications for conversational AI in finance include:

1. Personalized Financial Advice

An old-fashioned financial chatbot might have been able to answer common customer questions in the finance space, but it couldn’t deliver personalized recommendations. With its ability to dive into historical data, learn from previous interactions, and analyze discussions, conversational AI can accomplish a lot more. The right tool can generate insights and suggestions based on customer:

• Financial goals
• Repayment histories
• Risk tolerance
• Investment preferences
• Previous purchases

An accounting AI chatbot can even reach out proactively to customers, giving them advice on steps they can take to protect their finances. This not only leads to better customer experiences, but it can also boost customer loyalty and lifetime value.

2. Enhanced Customer Experiences

Customer service is often a big focus for any financial company with a conversational AI strategy. Conversational AI is incredible at powering virtual agents and chatbots that can provide 24/7 support to customers with various tasks. The right chatbot can allow customers to do everything from troubleshooting banking app issues, to transferring funds and paying bills.

By embedding AI into their conversational SMS, chatbot, and customer service strategies, finance companies can serve their customers wherever they are, at any time. Plus, since conversational AI learns from each interaction, it can become more effective over time.

Companies can even use AI to deliver proactive service to customers, using enterprise texting apps like Clerk Chat to send instant alerts to customers about bank issues, technology faults, and new products.

3. Improved Team Productivity

Today’s banking and finance customers expect businesses to offer consistent, personalized, and convenient service across a range of channels. Countless consumers are already texting customer service teams on a daily basis, or booking appointments with advisors.

Unfortunately, delivering a consistent level of service is time-consuming and expensive. It requires companies to invest in a significant number of staff and provide them with all the tools they need to support customers on a daily basis.

While conversational AI in financial services doesn’t eliminate the need for human employees, it does take some extra work off their plate. When conversational tools can automate simple customer requests and processes, teams have more time to focus on more complex tasks.

Plus, many conversational AI solutions can automate things like recording and transcribing conversations and summarizing discussions, saving teams additional time. Chatbots can even share forms and document lists with customers, and send reminders via a conversational messaging platform, to ensure companies collect critical signatures and data.

4. Exceptional Customer Onboarding

A smooth and frictionless onboarding experience is often crucial in the finance sector. It helps to improve product adoption, engage customers, and boost customer retention rates. With an AI chatbot banking solution, powered by conversational AI, finance companies can improve the onboarding experience. They can give every customer an assistant to walk them through the process.

Conversational AI can provide insights into credit limits, account setup strategies, and other information as customers access new apps and features. They can share terms and conditions, company policies, and common troubleshooting techniques.

An AI message can even remind customers to take additional steps when setting up accounts, like creating recurring payments, or entering authentication details.

5. Rich Customer Data Insights

It’s hard to give customers an excellent experience in the financial sector if you don’t know much about their concerns, pain points, and queries. Conversational AI can help companies gather the insights they need to separate themselves from the competition.

A conversational messaging platform can offer companies access to sentiment and intent analysis tools that help them to better understand their target audience. These tools can provide insights into the most common insurance SMS queries shared by customers, or the types of challenges users face when setting up accounts.

They can use sentiment analysis to help businesses understand which actions and strategies improve customer loyalty, and which lead to higher chances of churn. Plus, when these systems use integrations to connect with your other communication channels, they can offer a comprehensive insight into the full customer journey.

6. Strengthened Compliance and Security

Digital transformation is crucial in the finance sector, but it comes with a lot of challenges. After all, the finance landscape is highly regulated, and companies need to ensure they’re constantly adhering to expectations about how they manage, store, and protect data.

The right conversational AI solution can help companies stay compliant with critical guidelines. Solutions like Clerk Chat, for instance, offer extensive access to text messaging security solutions, and enable compliance with archiving tools like Smarsh.

Conversational AI solutions can also help companies stay one step ahead of potential risks. They can analyze transaction data and patterns, identifying activities that might indicate financial fraud. They can even automatically notify customers and business leaders when risks emerge.

7. Better Competitive Benchmarking

We’ve already noted that conversational AI for banking and finance is excellent for gaining insights into your customers. However, it can also help you gather more data about competitors in your industry. The right solutions can gather data from a range of touchpoints, including Microsoft Teams SMS, contact center tools, social media platforms, and CRM systems.

This allows companies to create comprehensive customer profiles and journey maps. From there, your conversational AI solution can gather data about competitors in your industry, using social listening and strategic analysis to help you compare your performance to other vendors in your industry.

Innovative technologies can help you identify new ways to differentiate yourself from the competition, perhaps by enabling two-way text messaging, or creating a new product or service. It can even help you predict which products and services are most likely to thrive in the industry.

8. Increased Revenue

Perhaps one of the biggest benefits of conversational AI in financial services is its ability to increase your revenue and conversion rates. First, since this technology can improve the customer experience, with auto reply text message options and enhanced self-service, it boosts your chances of gaining loyal customers who stick with your brand for longer.

Secondly, conversational AI gives you the data and technology you need to build more powerful marketing campaigns. You can use the right platform to invest in personalized SMS marketing efforts, where you recommend specific products to customers based on their history and preferences.

Plus, conversational AI can open the door to new service and product opportunities. It can allow you to give customers a comprehensive 24/7 financial advisor they can communicate with at all times. Or it could allow you to offer subscription services, where AI solutions deliver investment tips and banking insights to customers via text or email.

Unlock the Benefits of Conversational AI with Clerk Chat

For financial service providers, conversational AI represents a powerful resource for growth. The right technology can integrate with your SMS for banking apps and other customer service tools to help you deliver a better experience to customers, increasing lifetime value and retention.

It can open the door to extra revenue, with personalized product recommendations and new services, and help your team become more productive and efficient. Plus, conversational AI can even help you navigate the complex world of compliance in the finance space.

At Clerk Chat, we make it easy for companies to discover the benefits of conversational AI in financial services, with an intelligent platform. Our company’s extensive text messaging compliance features, with conversational AI, automation, and integrations, help you build the ultimate strategy for success.

Discover how you can unlock new revenue, delight your customers, and differentiate yourself from the competition, while reducing operational costs, with Clerk Chat today.

Contact us for a demo of our world-leading conversational platform.