Using Chatbots for Financial Services

Last Updated on October 20, 2020 by Sean B

The banking, insurance, financial services, and the investing sector are ever-changing, and using chatbots for financial services is one of the more recent changes. The use of artificial intelligence in almost every sector is increasing, and customers’ expectations are as well.

The growth of the internet means that customers are not limited to using their local bank anymore, they can shop around for the best interest rates, and the best products. As the internet and cell service gets faster and is used more widely for banking, investing, and other financial services, customers are demanding access to higher quality customer service at ever greater speeds.

The increase in customers also means the use of new technologies is necessary to meet their expectations. Customers want seamless banking, investing, and other financial services. Financial Institutions that can’t offer this risk losing customers to the competition.

Credit unions, banks, and investment firms all across the globe are testing new technologies and applications to deploy smart solutions to improve the digital banking experience for their customers.

As we step forward into the era of AI, more and more companies in the financial sector are investing in AI-powered chatbots to reduce cost and to please tech-savvy customers from around the globe.

A man checking his investments online

Using Chatbots for Financial Services Makes Sense

In many banks, AI-powered chatbots are used to facilitate two-way communication. AI chatbots replace traditional channels of communication such as email, text, or phone call. The main objective of banks in the tech era is to offer transactional and quick support to its customers.

Basic banking tasks such as bank account details, loan inquiries, and balance inquiries can be easily carried out using a chatbot. Using AI-powered chatbots to handle simple banking tasks allows the customer representatives to focus more on complex issues. This in return leads to a positive banking experience for the account holders.

Digital technologies and artificial intelligence have progressed to an extent that now, it provides the banking industry with expanded forms of communication and engagement. Chatbots are slowly moving to voice interactions rather than text.

While many large banking and finance organizations have adopted AI smart solutions and have jumped on the chatbot bandwagon, not everyone finds it suitable in the long run. For credit unions and banks to succeed in chatbot solutions, they must understand the behavior and attitude of the consumers towards them. The relationship between a banker and a customer is based on useful advice and not on convenience. That is why most people find chatbots in the banking industry troublesome.

A woman logging into her online banking service.

Chatbots for Banking, How AI chatbots Improve the Finance and Banking Sector

Chatbots are known to streamline the interaction between an organization and a customer by minimizing human interference.

In the past decade, chatbots could only answer frequently asked questions. But, now, they have matured. With artificial intelligence and predefined actions, they do not only communicate effectively but also provide smart solutions like virtual agents.

With the continuous advancement in technology, chatbots have managed to create an influential impact on the businesses, including the banking sector.

It is 2020 and chatbots are categorized as digital employees in the finance sector as they perform multiple banking tasks on their own, without human interference. You can manage them using text to speech or speech to text.

Chatbots for Investing, Delivering Value in the Banking and Finance Domain

AI-powered chatbots are bringing about a good shift in how banking and finance services are consumed and delivered. These bots are powered by various artificial intelligence software and can initiate conversations with bank customers via different channels such as the website, mobile devices, Facebook Messenger, SMS, or Telegram.

Tech-savvy banking organizations have taken a huge leap and are investing in AI chatbot solutions to provide personalized banking experience to their customers. In the era of conversational financing and banking, chatbots have become digital employees that answer all of your queries within seconds, without human interference through your preferred channel.

For instance, an AI-powered chatbot working in the banking sector could help you know about:

  • My last 10 transactions?
  • The list of nearby ATMs
  • The current balance available in my account

A closeup of the engraving of George Washington's face on the US One Dollar Bill.

Top 5 Uses of AI-Powered Chatbots for Banking

As in any customer service oriented industry, the best uses for an AI Chatbot in the Banking and Finance Industry are the simple ones. They are products or services that fill a need the customer has, In banking, chatbots that provide customers a way to quickly find what services they need and provide them with control over the money in their accounts are going to win every time.

Here are the top 5 uses of chatbots for financial services, in the banking sector:

They Help Answer Frequently Asked Questions

Today, every 1 in 3 customers is a tech-savvy person, looking for a way to get quick access to his bank account’s information. That’s why they want bank-related queries to be answered on short notice. However, a chatbot could give a brief yet an accurate answer to some questions like:

  • How can I freeze my bank account if my debit card is stolen or lost?
  • Can I protect my digital banking account with a password?
  • What types of mortgage loans do you offer?
  • What is the eligibility criterion for applying for a home loan?
  • How can I start net banking?

Banks can streamline the customer care sector by integrating an AI-powered chatbot to their applications or to their websites. With chatbots handling simple queries, customer care representatives can resolve escalated issues that require human involvement.

Chatbots Improve Marketing Strategies for Banks

Banks using chatbots for marketing can increase customer loyalty by improving customer experience. chatbots have the potential to:

  • Generate revenues
  • Increase conversion rates
  • Accumulate and analyze customer feedback on a timely basis
  • Relevant push notifications to keep the customer updated on his account activities

With the constant assistance of chatbots, banks can easily collect customers’ feedback through surveys and rate their performance on this ground.

They Facilitate and Perform Core Banking Activities

Advanced AI-powered chatbots even help you handle core banking activities such as issuing a mortgage, collecting loan payments, and EMI installments through conversational artificial intelligence.

Moreover, chatbots give liability to the customer to pay invoices, transfer money, and even apply for a loan, using only a chat window.

Chatbots perform core banking activities in a secure way. It is unacceptable for any bank to make errors while transacting money or depositing it. Therefore, it is advised to test your smart chatbot solutions before putting them on duties.

They Simplify the Consumer Onboarding Process

Chatbots streamline the process for customers stuck on application forms. Using chatbots do not only increase the chances of people filling those application forms but also shorten the time taken to fill an application form. While it usually takes 10 minutes to fill out an application form at the bank, it takes only 4 to 5 minutes for you to fill a form digitally using a chatbot.

AI-chatbot can help you in answering queries, requesting documents and images simultaneously, within minutes.

Customer onboarding is an opportunity for any institution to generate revenue. Therefore, all the banks aim to enroll new customers as efficiently and quickly as possible. A smooth onboarding process leads to higher usage rates and adoption.

They Analyze Customer Sentiment, Just by Conversing With Them

A customer’s sentiments tell how a person feels about the banking services provided to him. Finance algorithms change rapidly and it becomes difficult to analyze results and to understand the customer’s experience with your banking services.

AI-chatbots have the ability to analyze sentiments. If the customer is upset or dissatisfied, the bot can take another route to handle complaints but this time, with a real customer representative.

This newly introduced feature of chatbots is widely used in customer care and marketing of a financial institute to analyze customers’ data accumulated through surveys, social media platforms, testimonials and reviews.

A man logging into his bank account to use their chatbot for assistance.transfers money

Powerful AI Chatbots for Banking and Financial Services

Many banks are still experimenting with AI-based solutions for streamlining financial services. Apart from insurance companies and banks, other financial companies can also benefit from the growing technology of artificial intelligence.

Customer can now check out their stock portfolios, the status of their loan applications and even request a quick refund using AI-powered conversational bots.

We have compiled a list of powerful chatbots being used in the banking and finance industry. Have a look at them and see how they streamline financial processes:


KAI is Kasisto’s AI platform where they claim to help banks and financial institutes. They create custom AI chatbots to answer frequently answered questions and to perform basic tasks such as reviewing account details, making payments, etc.

KAI chatbot also helps customers to manage their funds if they have multiple accounts. However, the software transfers the conversation to a human customer representative if the chatbot cannot resolve the problem.

Chatbots developed by Kasisto can be easily integrated into your banking website, application, and dashboard for the employees.

KAI also converses with customers who want a certain task done such as applying for a credit card, opening a bank account, and managing funds. Moreover, you can also file some requests as a customer. The software sends your requests directly to the chatbot where it processes before sending you an approval.

Digital Genius

Their AI-powered chatbot, ‘Co-Pilot’ helps businesses to automate by answering frequently asked support questions. The software integrates with other powerful applications such as Zendesk and Salesforce to access management tools.

Integration with Salesforce and Zendesk allows the chatbot to find accurate answers to customer’s questions. The natural processing language (NLP) allows the chatbot to pick words from a question and find a relevant answer on these platforms.

The answers given by co-pilot are totally based on the customer’s data. The chatbot can either send the answer on its own or pass the problem to the customer care representative if it has no relevant answer.

Nuance’s Nina, the chatbot

Nuance is widely known for providing AI solutions to healthcare organizations. However, they have recently launched a customer care virtual agent for the banking industry, known as Nina.

Users can ask basic questions to the chatbot using text or voice. It integrates smoothly with the bank’s website or application.

The software is typically built for large-scale financial companies. So, it is also made to be compatible with SMART TVs and SMS applications.

It also helps in advertising, marketing, and customer on-boarding. A new customer finds it difficult to open an account but with the help of AI-powered virtual assistance, it would be really easy, also providing the customer with seamless positive banking experience.


PayPal has an AI-powered conversational solution that runs through Facebook Messenger. The chatbot asks the user to log in every time in order to access personal data. This ensures security while making online transactions through PayPal.

The chatbot can also bring up the user’s disputed payment so that they can check the status of each payment.

Users can ask the PayPal chatbot about:

  • Unauthorized charges
  • Declined payments
  • Passwords
  • Limitations
  • Account Holds

Apart from using an AI-powered chatbot, the company also claims to us Machine language for fraud detection.

A picture of currency from various countries.

Benefits of Using Chatbots for Banking

Juniper Research reports that people will save billions of dollars by using chatbots in the coming decade. According to the same report, chatbots will save at least 8 million dollars annual cost. These metrics say more than enough to prove their credibility in the banking sector.

Here are some important benefits of chatbots for financial services:

Higher Margins of Profits and Cost Savings

Chatbots solve more than 20% of the finance industry’s problems using automation, ML, and artificial intelligence. The burden of workload decreases from the shoulders of call agents. They tend to focus more on promoting bank products, making sales and increasing profit margins.

Other than that, they are less expensive and easy to operate than stand-alone software for mobile applications and websites.

Increase in Conversion Rates

Chatbots are custom AI-solutions that can be programmed to offer precise services. For instance, a virtual assistant only looks for information to assist the bank’s customers. A virtual marketing agent will automatically recommend a newly launched card to the customer.

Such automation urges tech-savvy customers to keep coming for more. Ultimately, increasing the conversion rates.

They are Proactive

Advanced AI-powered chatbots provide the users with large volumes of data to set their budgets or to track their expenses for improved financial management.

Customization and Ease of Use

The global trend is changing rapidly. People now prefer to use speech instead of texting. An AI-powered chatbot can be programmed to personalize your content and give relevant answers to your customers using speech. In the next decade, all the tech-savvy customers will expect this of banks and other financial organizations.

The Takeaway

Consumers look to their banks, insurance companies, and financial service providers for a sense of trust, help and technical support. AI-powered chatbots make it possible to provide personalized scalable services to the customers while reducing the pressure off the customer care team.

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2 thoughts on “Using Chatbots for Financial Services”

  1. Thanks for putting this together, Sean.
    The idea of AI constructs handling your personal assets and finances is definitely viable and will one day replace the need for customer service agents (ones with social security numbers at least). It does bring up some philosophical questions though.. Whose responsibility is it if anything goes wrong? whoever wrote the program or the bank’s? whose responsibility is it then to make it right? Also, could banks somehow abuse these “Automated” systems for their own profits?

    • Bashar,

      Interesting question, I would think the Bank is responsible. Like any other marketing campaign or tool that can go wrong, the company purchasing it has the responsibility to understand the potential problems and make sure their developer has accounted for them. As for the systems being abused, there will always be businesses willing to take shortcuts to profit. As consumers, we need to make sure we are protecting ourselves and keeping an eye on every company and individual we deal with. It’s really all we can do.



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