As central banks worldwide raise interest rates in response to inflation, the world is on the verge of a global recession in the coming year. Several financial maladies appear to threaten emerging markets and developing economies, which could cause them serious harm.
The currently anticipated path of interest-rate hikes and other policy interventions may not be sufficient to return global inflation to pre-pandemic levels. Investors expect that by 2023, global interest rates will have increased by more than two percentage points above their 2021 average of approximately four percent.
If supply chain disruptions and labor market pressures don't abate, studies indicate that these interest rate hikes could leave the global core inflation rate (excluding energy) at approximately 5% in 2023. This rate would be nearly double the five-year average preceding the pandemic. The report's model suggests that central banks may need to raise interest rates by an additional two percentage points to achieve their desired rate of global inflation reduction.
With a looming recession creating significant customer anxiety, how can banks and credit unions transition from transactional AI to more nuanced conversational AI?
One of the most long-lasting ways for banks to maintain their customer base during this trying time is to improve the customer experience. With a recession looming, customers want answers from their banks–each experience could make or break your customer relationships. Fortunately, conversational AI is a valuable tool for improving and fortifying a positive customer experience.
Historically, banks and other financial institutions had two ways to communicate with individuals. Either they could maintain a sophisticated presence across multiple platforms and channels or require anyone who wishes to communicate with them to use only two channels.
Both strategies have significant disadvantages. However, with discussion-based conversational AI, it's possible to have the best of both worlds.
Reading consumer messages across multiple platforms and channels is a tedious process. Therefore, it's a perfect opportunity for conversational AI to shine! A bank can quickly train conversational AI agents to operate on all channels and platforms. Then, they can compile all the discovered messages in a single location to provide transactional, resolvable, and customized data.
For example, banks can use conversational AI to inform customers about their account balance, debit/credit card spending, loans, and expiration dates. Among other capabilities, it can process payments and activate debit and credit cards.
One strategy is to view conversational AI as a "sidekick" to existing customer support teams. Virtual AI assistants can and should handle complete transactions, such as changing an address, canceling a payment, updating a standing order, identifying a specific need, and routing the customer to the appropriate specialist.
Additionally, the pandemic and accompanying lockdowns have increased the average consumer's willingness to communicate digitally with businesses. Before the pandemic, conversational AI led customers through a service interaction. Customers are now much more receptive to interacting with virtual AI assistants that can complete various tasks.
We can take advantage of their efficiency gains now that conversational AI agents can provide satisfactory service. The vast majority of customer inquiries pertain to one of a short list of superficial concerns.
Conversational AI can initiate and satisfactorily conclude a customer inquiry in many instances. Banks and other institutions can rely less on armies of customer service representatives to perform the same repetitive task.
This eliminates the need for customers to wait on hold for a human agent. Anyone who has examined the data knows that customers dislike being on hold. By offering faster support, available 24/7, this issue can transform banks' customer experience and prevent them from getting fined because of missed customer complaints.
Most often, when a conversational AI responds to a customer's inquiry, the customer's problem is effectively resolved. However, there will be times when human intervention is needed--or when a customer requests a human representative.
Even in these circumstances, conversational AI improves customer efficiency and satisfaction. Before transferring a customer to a representative, they can collect pertinent information. This may involve gathering identifying information and understanding the customer's issue.
With relevant data gathered, the customer is ensured that they will speak with a representative who is familiar with their issue. In addition, the agent will not be required to request identification information. This significantly expedites the customer support process for both customers and banking employees.
It's possible to transfer funds between accounts using a banking conversational AI solution, which could prevent fraud and cyberattacks. There were 127 million credit or debit card fraud victims in the United States in 2021. As such, the prevention of fraud in banks and the financial sector as a whole is crucial.
Conversational AI can ask context-based questions to prove that the user is not a robot and immediately track the user's location to review transaction history. If any of these factors are novel, the conversational AI agent will automatically ask the user questions from the previous context to verify that the correct person is interacting. If there are concerns, a more detailed authentication procedure can be implemented to confirm that the user is who they claim to be; in some cases, this may involve an escalation to a live agent.
Customer experience is one of the most critical aspects of banking. Considering the impending recession, it's more important than ever for banks to keep their customers satisfied and be able to address their concerns.
Currently, most customer service agents can’t handle the volume of customer requests. This is the impetus for banking services, including consumer banking, cooperative banking, and credit unions, to embrace a digital transformation with conversational AI.
As these issues are resolved and customer experiences improve, even in the most desperate of situations that may arise due to a recession, this will create significantly better experiences in the banking industry and keep customers loyal over time.
If you're interested in learning more about how conversational AI can improve your banking operations, download our free case study.