5 min readWe have entered a new era of client services. High turnover rates, rising cost pressures, and changing consumer needs put pressure on traditional insurance and banking providers. Customers demand self-service. They are no longer to wait for an employee to help them.
In today’s COVID-19 reality, chatbots are a new norm for companies striving to digitize offers and minimize human interactions. Chatbots provide a reliable and cost-effective way to boost consumer engagement while reducing dependency on human operators.
We offer an overview of chatbot solutions, their impact on the insurance and banking industries, and consumer reactions to these transformations.
Why Do Insurers and Banks Need Chatbots?
Insurance
Online access to life insurance and annuity policies is expected to become a commodity in the next few years. By 2025, 58 percent of Americans expect to use a robo advisor, while already prefer to use self-service options instead of speaking with a company representative. Millennials and Gen Z will drive this adoption. A recent survey of US adults by Vangard shows that Millennials twice as likely as older investors to consider using a robo advisor.
Forward-thinking insurance companies are already taking advantage of increasingly sophisticated robo advisory services. These provide immediate value by answering customer queries, automating insurance sales cycles, underwriting processes, policy, and claims processing.
Banking
In a recent survey, 89 percent of respondents indicated that they’ve used mobile banking. Moreover, over 40 percent of millennials have switched banks due to poor service, with 77 percent of users saying they would switch to a bank offering better service. And over a quarter (26 percent) of respondents would prefer a bank offering 24/7 chatbot support.
The market is open to changes and new ways of human-computer interaction with these statistics taken into consideration. Developing a comfortable communication interface—either mobile, web, or both— is crucial for banks and insurers to remain competitive and relevant for their customers.
What Types of Chatbot Solutions Are Available?
Chatbot intelligence can range from answering frequent questions to having the human-level intelligence of a service employee. Companies can identify an optimal intelligence level for their chatbot solution based on specific business needs and use cases.
FAQ Chatbot
FAQ Chatbots are the simplest form of a chatbot, which can bring plenty of value. It can understand questions and offer relevant answers.
Virtual Assistant
A Virtual Assistant possesses a higher intelligence level and more integration with enterprise systems. It can respond to basic requests, such as looking up personal information or scheduling appointments.
Virtual Agent
Virtual Agents are the most advanced chatbots, capable of resolving emerging issues with human-like attention and care. These intelligent bots can handle complex dialogs, processes, and security protocols.
How Can Banking and Insurance Companies Use Chatbots?
Banking
Kasisto
Kasisto’s conversational AI platform, KAI, allows companies to create branded virtual assistants and chatbots across multiple digital channels, such as employee dashboards and smartphone apps. These can include loan or credit card applications, product discovery, or customer support.
Bank of America
Bank of America (BofA) has launched Erica—a voice- and text-enabled digital assistant designed to help customers make smarter banking decisions. It can send notifications, identify areas where customers can save money, provide credit score updates, and facilitate bill pay—all within the BofA app.
JPMorgan Chase
Unlike its competitors, JPMorgan Chase is utilizing bots to streamline back-office operations. The bank has launched COIN to analyze complex contracts faster and more proficiently than human lawyers—saving more than 360,000 labor hours.
PayPal
PayPal offers an AI-powered customer service chatbot that can run via Facebook messenger. The chatbot asks the users to log in each time they use it to access personal data for security reasons. Apart from answering account-related queries, it can also bring up a list of disputed payments for approval.
Commonwealth Bank
Commonwealth Bank launched a chatbot called Ceba to assist customers with more than 200 banking activities such as activating their card, checking account balance, making payments, or getting cardless cash. CBA expects it to understand 500,000 ways customers might ask for 500 different banking activities within one year.
Insurance
Lemonade
This peer-to-peer online property and casualty insurer relies heavily on its app-based chatbots. Backed by AI, the chatbots can respond quickly to various customer queries, craft personalized insurance policies and quotes for customers right in the Lemonade app, and process claims.
Next Insurance
This auto insurer launched a chatbot on Facebook Messenger for small businesses to obtain quotes and buy insurance. In partnership with SmallTalk, they’ve tailored the chatbot attributes to deliver tailored insurance policies and quick and precise responses that drive customer engagement.
Trōv
Trōv provides a mobile platform for on-demand insurance covering personal items such as electronic gadgets, home appliances, sports equipment, and musical instruments. The company has integrated a chatbot into its app to processes customer queries and claims by asking customers about the incident.
LeO
This insurer offers a web-based chatbot, providing personalized quotes for home and auto insurance within seconds. The company also launched a chatbot for agents and brokers to help schedule calls and meetings, collect leads, and automatically respond to customer questions.
To remain competitive, banks and insurance providers must place the customer experience at the heart of their services. Adding a digital channel to the distribution network is no longer sufficient. Companies must react quickly to the changing consumer needs with innovative conversational AI solutions like chatbots, ensuring faster responses and higher consumer engagement.
Are you creating the best experience for customers?
Let’s talk about how SoftServe can empower you to deliver enhanced client services and value to both employees and customers. Learn more about Conversational AI in our latest whitepaper.