Is Conversational AI the expected gamechanger in banking?

Bankers Believe Conversational AI Will Be a Game-Changer, Eventually.

The level of acceptance and use of conversational AI is likely to continue growing over the next several years as the capabilities and deployment across multiple applications in every industry continues. While there has been unprecedented coverage of ChatGPT in the past several months, financial institutions will most likely be more hesitant than other industries to embrace the technology because of regulatory, privacy and risk tolerance issues.

Here are some thoughts around the impact of conversational AI in banking based on the research.

In the next one or two years, conversational AI is likely to become more widely adopted at tech and fintech firms than in traditional financial institutions. As customers become more familiar with using chatbots and virtual assistants for customer support, sales and account management, they will increasingly come to expect this type of communication and engagement from their financial institutions. The response from financial institutions globally reflects hesitation in full deployment.

Over the next three to five years, conversational AI will become more sophisticated, leading to wider use by consumers in every demographic category. This acceptance will come with increased expectations around the avoidance of biases, adherence to privacy concerns, and the integration of consumers themselves in the development of contextual communication.

As understanding of the capabilities of conversational AI increases, financial institutions will most likely also begin using this technology for more complex tasks, such as financial planning and investment advice.

Beyond the five-year timeframe, conversational AI is likely to become an integral part of the customer experience for financial institutions and other industries. This is reflected in the research: Respondents said they believe that more than 50% of implementations are “effective” or “very effective.” They see only 21% of implementations being ineffective.

As more customers become comfortable interacting with chatbots and virtual assistants, many may prefer these channels over traditional customer support or engagement methods. Conversational AI may also be integrated into other technologies, such as augmented reality and voice-activated devices, creating new metaverse opportunities for customer engagement.

Overall, the pace of adoption in the financial services industry will be at the mercy of functionality advancement, customer preferences, regulatory requirements and technological limitations.