Virtual Assistants in Banking: What You Need to Know

Virtual assistants have left the realms of science fiction a long, long time ago. We got used to having Siri, Alexa, and Google Assistant. We no longer play around or joke with them. In fact, unlike what multiple books and movies have predicted (they may still turn out to be right ― it’s too early to say), there is nothing mysterious or even fun in using virtual assistants. It’s simply a matter of convenience. But for a moment, let’s make a step back and define virtual assistants.


What are virtual assistants?

Virtual assistants are software programs that interact with people using AI (artificial intelligence), machine learning, and voice recognition technology. They are often confused with chatbots, but virtual assistants are much more advanced. Virtual assistants differ from chatbots in that they have higher cognitive intelligence capabilities, are more flexible and learn through Natural Language Processing (NLP), becoming better, smarter, and more personalized with time.

When it comes to personal use, virtual assistants are common, yet not overwhelmingly common. According to Statista, there are over 110 million virtual assistant users in the United States. As of 2019, Amazon’s Alexa was supported on around 60,000 smart home devices. Often, they are just one of the many features of electronic devices. They can respond to user commands, provide users with information, and assist in the control of other connected electronics. They are convenient and maybe most useful for people with various forms of disabilities.


How can virtual assistants be useful for banks?

However, when it comes to banks, virtual assistants can be extremely helpful for both the banks and the customers. Powered by AI, they can bring customer experience to a whole new level. Banking virtual assistants can learn from past chat history with a customer, analyze interactions they’ve already had from different sources, and use this data for customer service, marketing, reputation management, security, and other goals. Advanced virtual assistants mimic human interactions and don’t break down if the customer makes grammar and spelling errors. They are also able to process complicated queries and, most importantly, understand the context of the interaction.

As a result, virtual assistants can provide 24/7 customer service and integrate with social media and messenger channels like Telegram, Facebook Messenger, WhatsApp, and others to make customer service more familiar and more convenient for the users. Virtual assistants can shorten waiting times for the customers, give personalized advice, make simple transactions, notify them about unusual activities, and provide the users with advanced insights into their banking activities, such as how much they’ve spent this month and what they’ve spent their money on.

For banks, virtual assistants are a great way to save resources on customer service and reduce the workload on existing employees. Call centers are no one’s dream job, and by delegating manual administrative tasks to virtual assistants banks free the resources to work on strategic, creative, and challenging tasks and pay their employees for doing what the latter care about and are good at.

Lack of trust in banks is another problem virtual assistants might help with. Reports show that the trust in banks is decreasing: in 2020, only 29% of respondents trusted their banks to look after their long-term financial well-being, compared with 43% in 2018.

Virtual assistants have a real chance to improve a bank’s reputation. Customers are increasingly worried about their financial situation, and they’re looking for valuable insight and expert advice, which banks can offer.


Are virtual assistants in banking already being used?

Banking virtual assistants aren’t a thing of the future: they are already used in many banks all over the world. For example, Capital One has a virtual assistant called Eno. Among all other tasks, Eno acts as an extra line of defence against fraud. Fraud detection in banking is one of the most viral challenges, and it’s useful to have a virtual assistant involved in the process. It notifies you about any suspicious activity and makes sure your bank account is secure. Erica, the Bank of America’s voice-activated virtual assistant (this name was definitely not a coincidence)  and Smart Assistant that belongs to U.S. Bank allow to quickly transfer money or make payments to businesses, friends or family. You can literally tell U.S. Bank’s Smart Assistant to “transfer money to mom”, and it’ll do it in no time. The apps are being widely used and their user base grows very quickly: as of February 2021, Bank of America reports that there are 17 million total users of the Erica virtual assistant. This is an impressive increase of 67% since 2019.


What is the future of virtual assistants in banking?

Banks were late to the digitization party. There are many reasons for that, some of them being robust legacy systems, the lack of explainability and trust in new tools, regulatory factors, and governmental policies. In fact, proper digitization in the banking sector only happened in 2020, when it became impossible for people to go to banks. At the same time, financial apps were getting increasingly popular. Financial apps provided their users with various banking services but did that in a better, easier, and often gamified way. They cared about app design and user experience. They developed various features that made banking easier, such as split payments, spending analytics, and chatbots. Banks had to catch up, and today banks are investing more heavily in digital technology.

Virtual assistants in banking are still a new technology that most banks haven’t adopted. This means there’s still a way to stand out and show your customers that your bank is on the same page. That the bank is relevant, open to new technology, transparent, and trustworthy. So what should your bank’s assistant do?

Your digital assistant should answer your customer’s most prominent banking needs. The recent Digital Banking survey showed that these are the following:

  • Viewing statements and account balances (reported to be the most valuable feature by 33% of survey respondents)
  • Transferring funds between accounts (31%)
  • Bill pay (28%)
  • Peer-to-peer payments (11%)

However, virtual assistants shouldn’t stop at that. Often customers don’t know what they want until they get it. So plenty of testing and experimenting is required to develop a virtual assistant that will be as useful as possible. There are also some areas in banking that customers tend to ignore. Fraud detection in banking is one of them. Yet, it’s clearly an important one and will benefit from a virtual assistant.

Finally, banks will become more personalized in the future. After all, every other industry has already done that or is on its way to becoming more personalized. Smarter virtual assistants of the future will help with personalization and exceptional customer service. For example, they may greet the user using their language and location. Then, their communication will become tailored to the user and customized. It will be based on the user’s previous behaviors or interactions with the bank. The virtual assistant will send tailored reminders related to upcoming payments, provide spending analytics, and suggest banking products that are relevant to that user’s financial situation.


To sum up

Since 2020, we’re experiencing a rapid evolution of banking. Virtual assistants are the next logical step in this evolution. With time, more banks will add digital assistants to their mobile apps, and these assistants will become more and more sophisticated, helping customers to take care of their finances and banks to become more user-friendly, convenient, and helpful.


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