Chatbots Impact on Fintech and Banking

July 12, 2021
Sarah Gormley

Within the last few years, there has been a huge shift in the banking and financial sector as financial technology has become increasingly popular. Chatbots are one of the technologies that have revolutionized customer experience in the banking world. 

A chatbot is an artificial intelligence (AI) software program that simulates human conversation. Users communicate through an online chat or text-to-speech program on a website, messenger app, or telephone. The user talks with a chatbot as if they were speaking to a human in person. Chatbots were designed to interpret and process the things that the users say, displaying a pre-set response within seconds. 

The chatbot is the perfect tool to promote online banking. With users able to communicate online, there is no need to go to a bank and speak to someone in person, saving them time, energy, and money. The customer can work from wherever they choose, which has been particularly important during the Covid-19 pandemic, where it is necessary to stay socially distanced from others. In addition, chatbots can be programmed to link a bank account to other digital apps to assist the customer with paying bills, online shopping, transferring money, etc. 

There are many other benefits of incorporating chatbots into the fintech industry. With 24/7 service, they allow organizations to give rapid responses at any time of the day, demonstrating a high level of professionalism. This also prevents customers from getting irritated by having to wait for a response. Another major benefit is that chatbots have automatic fraud detection, creating a very safe and secure business environment. One of the reasons firms are interested in using chatbots is their ability to provide low-cost services. The alternative to chatbots would be hiring more agents, which would be more costly and less efficient.

The controversial aspect of a chatbot is that it may not be able to answer all of the customers’ questions. Since this is an automated system, the organization can input present responses to popular questions, but not all. Because of this, some people believe it is more beneficial to speak with a sales rep in person rather than use a chatbot. While this is true, the implementation of chatbots is still beneficial even if not all of the consumer’s questions can be answered. The organization administering the chatbot can create a preset that gives users information to contact the company directly, allowing them to get in touch with a representative on the phone or in person.

Chatbots are just one of many technologies changing the face of banking. Read more about the technologies that are actively changing the banking industry here

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