In today’s fast-paced banking landscape, the buzz around artificial intelligence (AI) and automation is palpable. It’s no wonder, as PwC predicts that AI is set to elevate workplace productivity by a whopping 40%. Banking institutions are increasingly turning to virtual assistants as a means to harness AI and boost self-service across digital and phone channels. However, the challenge lies in finding the right approach to address both current needs and future opportunities. Some banks may opt to tread cautiously, evaluating the pros and cons before fully embracing virtual assistants. While due diligence is essential when adopting new technology, the cost of waiting might outweigh the benefits of immediate action.

Technology continues to advance at an unprecedented pace. IBM’s data reveals that a staggering 90% of the world’s data was generated in the last two years, and AI technologies, like ChatGPT, are rapidly evolving to keep pace with this data explosion. And, many bankers recognize the potential of AI and automation to bring value to their institutions. In a recent survey by Arizent, bankers cited cost reduction (55%), improved customer experience (51%), and enhanced employee/operational efficiencies (51%) as the top benefits of automation. Financial institutions that capitalize on these advantages will find themselves in a favorable position, both internally and externally.

Bank customers are increasingly inclined to self-serve. Consumers have readily embraced AI technologies, seeking convenient and real-time solutions to their queries. With a 24/7 desire for quick solutions to financial issues, account holders expect their banks to offer intuitive digital solutions and self-service options. Moreover, Zendesk’s research found that a remarkable 89% of surveyed customers are willing to spend more with companies that offer self-help options, reducing their need to contact customer support.
Notably, Gen Z, the digital-native generation, is leading the charge in self-service expectations. With over 20% of the U.S. population and $360 billion in disposable income, their preferences carry significant weight.

Virtual assistants are poised to play a pivotal role in this transformation. The global virtual assistant market is projected to reach $11.2 billion by 2031, a considerable increase from $1.3 billion in 2021. With a plethora of options available, financial institutions must tread carefully. Given the vast amount of proprietary data banks handle, selecting the most suitable virtual assistant can seamlessly support customers with the right information, alleviating many routine service requests. This leads to operational efficiencies that lower costs and optimize the time of customer service representatives. Indeed, McKinsey discovered that harnessing big data can lead to a 3% boost in productivity and a 20-25% cost reduction.

As technology continues to evolve exponentially, and customers expect self-service options, virtual assistants allow banks to remain competitive while efficiently meeting customer expectations. However, banks must consider various factors in determining the best approach to unleash virtual assistants.

Here are three distinct approaches:

1. Build your own: Crafting a customized virtual assistant provides complete creative control. This approach suits banks with niche business segments or diverse customer bases. However, it’s a resource-intensive and time-consuming option that requires dedicated IT personnel.

2. Turnkey solution: For a faster implementation, banks can opt for a pre-built virtual assistant with ready-to-use features. These virtual assistants can be tailored to specific industries, like banking, benefiting from collective learning across many institutions. This approach significantly reduces IT resource requirements and simplifies staff training.

3. Integrated virtual assistant: This approach integrates the virtual assistant seamlessly into all customer interactions. It combines the advantages of the turnkey solution with enhanced customer experiences. While AI-enabled virtual assistants can handle a substantial portion of engagements, there are situations where customers require extra support or face complex issues. The virtual assistant can transfer interactions and historical context to live representatives, providing a seamless experience for the customer. Integrated virtual assistant solutions ensure that the customer can easily reach out to a live representative, leading to higher satisfaction and reducing abandonment rates.

The proliferation of AI and automation offers banks opportunities to better serve their customers and grow their businesses through virtual assistants. Enabling virtual assistants not only enhances efficiency and productivity within financial institutions, but also aligns with consumer expectations for self-service. With the right approach to virtual assistants, banks can stay competitive in the present and future banking landscape.

To learn more about the impact AI has in banking, register for Glia’s upcoming webinar, From Hype to Help: Unpacking Generative AI on Customer Service here.