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A chatbot is an artificial intelligence-powered application that communicates with human to solve a problem or respond to a question. With the help of robotics and artificial intelligence (AI), a chatbot can assist customers without the need for a customer service agent on the other end. Chatbots can be simple or extremely intelligent, depending on how they are programmed. A rules-based chatbot can only respond to very specific commands, whereas a machine-learning chatbot learns from each interaction.
Chatbots in banking are used by many firms through certain social media apps, such as Facebook Messenger, to provide customer service by conventional banking. These chatbots in banking firms help in taking the commands through voice or text commands and perform functions such as scheduling a payment & exploring recent transactions within the app. Customers can also use text messaging to manage their money, including viewing payment history and paying a credit card bill.
Furthermore, banks will need to place a greater emphasis on digital security to protect sensitive data. Therefore, there will be a surge in demand for chatbot based banking services in the near future as this would include investments in voice biometrics to verify that the customer is talking to a bot and not some stranger.
The global chatbot based banking market is segmented on the basis of component, deployment model, application, enterprise size and region. Based on component, the chatbot based banking market is bifurcated into solution and service. In terms of deployment model, the market is categorized into on-premise and cloud. On the basis of application, the market is divided into website, contact centers, social media, and mobile application. On the basis of enterprise size, the market is segregated into large enterprises and small & medium enterprises (SMEs). Geographically, the market is analyzed across several regions such as North America, Europe, Asia-Pacific, and Latin America, Middle East & Africa (LAMEA).
Key players operating in the global chatbot based banking industry include Kevit, Conversica Inc., Yellow Messenger, CONTUS, KeyReply, Aivo, International Business Machine (IBM) Corporation, Amazon Web Services (AWS) Inc., Google Inc., and Nuance Communications Inc. These companies have adopted several strategies such as product launches, partnerships, collaborations, mergers & acquisitions, and joint ventures to strengthen their foothold in the global chatbot based banking market.
Top Impacting Factors
Rise in need for 24*7 customer support at a lower operational cost and increase in adoption of cloud-based conversational bots by banking firms drive the growth of the chatbot based banking market. In addition, advancement of artificial intelligence and rise in number of SMEs propel the growth of the market. However, lack of precision in user voice authentication is expected to hamper the growth of the market. Contrarily, self-learning chatbots are being developed to provide a more human-like conversational experience, which is expected to provide lucrative opportunities to the chatbot based banking market in the coming years.
Rise in Need For 24*7 Customer Support at a Lower Operational Cost
Chatbots are becoming increasingly important in providing customers with round-the-clock support, allowing various industries to streamline and improve the customer experience they provide at every stage of the process. Various financial institutions have shifted their focus to quickly resolve customer inquiries and enhance customer experience. The ability to respond quickly to customer inquiries has become a critical component of an organization’s success. As a result, businesses view the chatbot as a powerful conversational interface for effectively engaging customers and providing a dynamic & rich user experience environment.
Moreover, many businesses have implemented chatbots that use AI and predictive analytic capabilities to allow users to communicate via voice and text. The chatbot helps users make payments, save money, transfer funds, and check balances, thus improving the quality of services provided to customers. Therefore, the need of banking firms to enhance customer interaction is expected to foster the growth for the global chatbot based banking market during the forecast period.
Rise in Adoption of Cloud-Based Conventional Bots By Banking Firms
Based on deployment mode, the chatbot based banking market is divided into cloud and on-premise. During the forecast period, the cloud segment is expected to lead the market in this segment. Investments from key players in the development of bot technology based on cognitive and AI systems drive the segment’s growth. During the forecast period, the on-premises segment is expected to grow due to SMEs' preference for low-cost services, which they achieve by implementing on-premises solutions in their business units.
Moreover, banking organizations can use on-premises services to automate their business processes while also assisting in the recommendation of their services to users and others. Therefore, rise in adoption of cloud-based conventional bots by banking firms is expected to boost the growth of the market during the forecast period.
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