Conversation Banking gains Traction

Felipe Boff, Executive Director of Products, IT, & Innovation, Mercantil do Brasil

Felipe Boff, Executive Director of Products, IT, & Innovation, Mercantil do Brasil

Something as simple as exchanging messages on your preferred chat platform can represent a brand new opportunity for different industries, especially banking, to increase their sales and customer base. Conversational methods like WhatsApp, Facebook Messenger, and iMessage, among others, have been empowered by companies to boost customer service, but their ability to help businesses goes beyond just customer support or efficiency gains.

During the most challenging days of the pandemic, we saw a variety of businesses employ chat mechanisms in new ways. For instance, in Brazil, a store’s employee used WhatsApp to manage customers. Much has evolved into something bigger and better since this initial approach when chat apps were employed by businesses during desperate times for survival and in the banking industry, we call it conversational banking.

If you Google conversational banking you would still see a lot of content related to the main use of this mechanism, customer services, and support in general. Usually, conversational banking is starts from the bank’s desire to gain efficiency by moving customers from their contact centers to chat platforms. By supporting those customers there, preferably by chatbots, the bank seeks to increase its efficiency and customer service level with faster answers. Even when the intervention of a human being is needed, the asynchronous essence of chats gives the bank the ability to optimize the number of operators supporting customers. Although these gains seem reasonable enough to pursue banks to employ this approach, it falls short of exploring the full potential of conversational banking.

“Conversational banking has the potential to expand the bank's reach into social classes that currently lack access to the bank's offerings due to a lack of customer knowledge or a customer's fear of trying something outside of their comfort zone”

Conversational banking when explored up to its full potential can represent a new channel for sales, especially in countries where internet access and cell phone devices have limitations when compared to developed countries. In countries like Brazil, where 99 percent of cell phones have WhatsApp installed, and among those 86 percent use WhatsApp at least once a day, the population is used to the platform and understands how to use it effectively. If we compare those platforms to dedicated apps the change in friction means a lot to businesses. Downloading an app, getting access to it, learning how to navigate, and finally doing business compared to the possibility of just opening a chat platform that the customer uses daily and starting a conversation that will guide her/him to the best possible outcome represents just the first sight of this reduction in friction.

Reducing friction is a very important process to increase sales and make our businesses more effective. Moreover, understanding how customers interact with businesses is imperative. Although we do not usually think about our interactions, most of them are synchronous. When we go to a store to buy something, we expect an answer to a question right away. If we call a contact center to deal with a situation, we don’t expect the call to stop in the middle of the process. Even when we are using a bank app the interaction is synchronous, if we click on the menu item for checking account balance, we want to receive the balance right away. This whole paradigm of synchronous interaction has changed with chat platforms. How many chats do you answer by the end of the day? Or how many times have you waited hours together to receive an answer? Irrespective of the nature of the chat method or the human behavior, the asynchronous conversation is generally accepted by customers when using conversational methods.

Those two factors combined, less friction and timely interactions, have the power to support banks, and not only banks but to offer better services to customers. Developing a new approach for sales using conversational methods also represents a new opportunity for banks to increase their omnichannel presence and to offer differentiation to customers. Conversational banking has the potential to expand the bank's reach into social classes that currently lack access to the bank's offerings due to a lack of customer knowledge or a customer's fear of trying something outside of their comfort zone. Expanding the meaning of conversational banking beyond its most recognized form can lever all the learning curves lived by those customers using their preferred chat platform into doing business faster and simpler.

Conversational banking should be used for more than just supporting the customer with their needs. It must be a journey to help the customer find what they are looking for even when they do not exactly know what that is. Creating mechanisms that help customers to navigate through this journey has a very strong suit to increase the conversion rate when compared to other channels. Conversational methods must be adaptable to the customer context. The act of interacting with the customer without a “fixed script” creates a completely new set of opportunities to empower engagement and sales. Conversational banking is not about chatbots or prefixed messages, it is about intertwining what the customer is looking for and what the bank has to offer. Conversational banking is a mix between autonomous support and human support according to the customer and the situation.

I understand this whole paradigm of a customized and adaptive interaction using conversational banking may seem too farfetched now. However, I can assure you, we have seen encouraging results regarding those platforms, not only by expanding conversational banking to sales but also by expanding the whole concept of conversation on chats for business to conversational commerce. The difficult question here is not whether or not to develop this approach, rather, can you survive with a method while this gains traction from your customer base?

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