How Voicebot in Banking Improves Customer Service with Conversational AI

The modern IT industry offers countless features and solutions that can significantly scale any business and help achieve new heights in provided services. One of the most recent technologies, which already seems familiar to most of us, is artificial intelligence and related solutions.

Today, we would like to discuss voicebots in banking and how such software can improve the customer experience, boost the efficiency of your customer support services, and improve client engagement even during routine operations.

So, the first topic in our discussion is what exactly a voicebot is, how it works, and the role of AI in this solution.

What Is a Voicebot and How Does It Work in Banking?

Voice-operated technologies are not a new solution. They have been used for years, especially in the banking industry.

For instance, many banks worldwide still regularly use Interactive Voice Response (IVR), also called robotic calls, to approve or decline certain operations. It is a cheap and efficient security solution, similar to two-factor authentication.

In addition to improved security measures, such robotic calls help to cut customer support expenses, provide a certain level of automation, and allow banks to use other resources more efficiently. Such IVRs were utilized for making client calls and explaining to them:

• The reason for the call (need to approve authorization, performing transaction, etc)
• The possible interactions (press 1 to approve, press 2 to decline, press 3 for more information, etc)

Additionally, such bots become a standard tool for answering Frequently Asked Questions (FAQs) and covering the first customer support steps when a client contacts the company for assistance or additional details. Such a solution can cover up to 30% of routine calls, such as checking account balance, reporting, or requesting services, eventually saving thousands of dollars in operational costs annually.

Nevertheless, voice AI in banking offers exponentially more services and features, significantly improving and boosting the overall customer experience. Unlike its “ancestor”, such an AI-driven voice assistant can provide more personalized and convenient services to each independent individual, making the conversation more alive and pleasant.

Frankly, it is possible to assume that such voice assistants in banking are just a new, more advanced generation of previously mentioned IVR systems. Nevertheless, the advantage of such integrations is clear for many banking companies, as seen in the market changes. For example, according to the MRFR analysis, the voice assistant market size 2024 was estimated at 4.18 billion US dollars. The market is expected to grow, reaching around 25 billion US dollars in 2035.

How Voice AI in Banking Works?

After clarifying how voicebot in banking work, we can proceed to the next step: learning how the AI solution works and what advanced solutions it can offer.

Long story short, the theoretical difference between an IVR and voice AI is very small. IVR solutions are hard-coded, i.e., they have very strict and precise algorithms and rules to operate, such as receiving only dialed numbers (press 1 to agree), and are incapable of processing the actual voice commands from users (say “yes” to agree).

On the other hand, voice-operated artificial intelligence does not struggle to receive, process, and perform speech commands because its algorithms and instruments are much more sophisticated. One of the most important technologies behind such functionality is:

• Natural Language Processing, or simply NLP, a tech solution that allows AI to understand and generate human-like text. As a result, an AI-driven voicebot is more flexible regarding request processing.
• Speech-to-Text solution (STT) to transcribe voice commands into text, so that artificial intelligence can process and perform the request accurately.

Simply put, despite their name, voicebots cannot be operated solely by voice commands. They can only process text formats. Therefore, it is impossible to enable such functionality without STT and NLP technologies. Still, the transcription processes from speech to text and vice versa happen in the background, keeping the user interface voice-based. This still allows us to name such software as voicebots or virtual assistants.

The Role of Voice AI in Modern Banking

After learning about voice assistants in banking and getting a brief explanation of how they operate, we can discuss the more important topic: what is the role of such solutions in modern banking, and how to benefit from such integrations.

In a nutshell, most such modern AI solutions for banking can be used for:

• Automating routine customer queries
• 24/7 customer support
• Personal banking assistance

Automating Routine Queries

As mentioned before, process automation is one of the core advantages of such software and its most popular use case.

In a nutshell, using solutions like IVR or voicebot in banking helps companies cut expenses on certain customer support services and streamline the most basic, repetitive, and routine operations or requests.

Such results can be achieved even with the simplest robotic calls, without implementing a more advanced and complex voice AI technology. Nevertheless, we highly recommend investing more and integrating an AI-driven voicebot in banking instead of choosing IVRs.

The core reasons to spend more resources on such solutions are:

• Highly personalized services, possible thanks to artificial intelligence and NLP under the hood. Such software can maintain a real-life conversation, addressing the customers’ needs and requests faster and more accurately.
• Better customer satisfaction thanks to human-like conversation and more advanced functionality. Dealing with primitive menu-driven robotized systems is commonly annoying and unpleasant for many. So, asking to be contacted by a customer support specialist is a common request in such cases.
• Issue resolutions are faster and more accurate. Unlike modern AI solutions, older IVR systems have stringent boundaries and cannot help address issues that are not included in their instructions.

To sum up, an AI-powered voicebot in banking for customer service is a much more efficient and convenient instrument. It helps streamline some repetitive operations and addresses requests much faster and accurately. It benefits both the business and the client. Finally, such solutions are more client-friendly and help to achieve much higher customer satisfaction due to more personalized, accurate, and faster human-like responses.

24/7 Customer Support

Another great advantage of using basically any robotized system is 24/7 access. As a result, your bank clients can get help of any type and at any time, regardless of the urgency of their request. The only alternative to such services is scaling your customer support team and assigning some employees to night shifts.

A voicebot in banking doesn’t need breaks for coffee or food, doesn’t need sleep, and, if trained correctly, is qualified to provide customers with proper support. Fortunately, any experienced fintech application development company familiar with AI and chatbot technologies can easily deliver the expected results as fast as possible, meeting your potential resource limitations.

Personal Banking Assistance

Eventually, multitasking capability will be the reason for choosing an AI-driven voicebot in banking instead of an IVR or even replacing one.

Systems with artificial intelligence under the hood can be scaled to perform new features on demand. For instance, you can start by integrating voice assistants in banking for customer service. Then, based on your analysis of the target audience, its needs, and preferences, you can transform such a solution into something more complex and unique, like a personal banking assistant.

As a result, such technology can help your customers and advise them on decisions like investments. Alternatively, such software can be used for advanced financial management, analysis of clients’ spending, and suggesting ways to cut expenses or save costs.

Use Cases of Voicebots in Financial Services

As we said before, the variety of potential use cases of voicebot in banking is limitless. Still, using such tech to improve customer service is the most common, simple, and manageable approach. Still, it is possible to name a few extra cases when banks utilized voice assistants differently.

PrivatBank Voice Autentification

One of the biggest Ukrainian banks, PrivatBank, allows clients to use voice biometrics technology.

Simply put, clients can enable a voice authentication mechanism based on sophisticated algorithms and identification methods for advanced security and safer services. The voice assistant can recognize users' unique voice characteristics to prove their identity.

As a result, voice operations like transaction approval become more secure: the system knows it speaks to a real user and bank account owner. If voice recognition doesn’t work, and the virtual assistant hesitates about the true identity of its interlocutor, it launches additional security protocols and requests extra steps to prove the user's identity.

As a result, voice commands and requests become more convenient for bank users and ensure higher safety of such operations to prevent potential fraudulent activity.

Erica from Bank of America

Erica, the virtual assistant, is one of the best examples of how you can use the maximum capacity of a voicebot in banking.

This software solution suggests multiple features, including:

• Support with app navigation and accessing account information
• Search and locate transactions
• Improved card management
• Live chat for answering FAQs or connecting with a support specialist

Long story short, Bank of America designed its voicebot to perform more than just customer support, transforming it into a more complex and full-fledged virtual assistant capable of multitasking and serving different client needs. It can even perform voice payments in banking apps or linked third-party services like Zelle.

AXIS Bank’s Voice Assistant

Finally, AXIS Bank’s solution is an excellent illustration of how to gradually scale the functionality of a banking voicebot over time.

They started with a simple IVR system with old-school robotized calls and number dialing. Then, they integrated a more advanced voice assistant capable of recognizing speech to improve and speed up customer support services and increase the number of managed customer queries.

Lately, the AXIS team introduced AHA! 2.0, powered by machine learning and artificial intelligence with NLP under the hood. This new version also provides more features and services, such as seamless and human-like conversations, facilitation of FAQs, and support for multiple languages. Besides, this new virtual assistant can also process voice payments in banking app.

How to Successfully Integrate a Voicebot in Your Bank

Apart from discussing the benefits and reasons to integrate a voicebot in banking industry, we can also explain the basic approach to ensure the success of such tech implementation. Long story short, the essential checklist is similar to any other software integration, including three main steps:

1. Assessing customer needs and business goals
2. Choosing the right voicebot and tech stack
3. Ensuring integration with core banking systems

Assessing Customer Needs and Business Goals

Obviously, any of your software projects must start with the discovery phase. Before beginning the development, you must learn what functionality you need and how to achieve it.

To put it briefly, you should clarify your business expectations from future integration and compare them to the needs of your target audience. It implies not only researching major features or services, but also performing more in-depth analysis.

In addition to clarifying the need for improved customer support services, you should define what exact processes could and should be involved. For example, automating FAQs seems a reasonable and obvious approach. However, staying with an expert's involvement might be preferable for more complex or urgent services like investment suggestions or learning more about bank proposals.

It is essential to perform a well-organized and complete discovery phase. The more information you gather during it, the easier it will be to pinpoint core issues or challenges, find the most suitable solutions, and eventually succeed in voice assistant integration.

Choosing the Right Voicebot and Tech Stack

After learning your needs and expectations for the upcoming project, you should find the most convenient and suitable technologies, capable of addressing your business needs and meeting other potential parameters, such as:

• Compatibility with your existing software system
• Available budget
• Software functionality expectations

In addition to choosing development tools, you must select certain technologies, such as a natural language processing AI model, or consider Whisper vs. Google speech-to-text solutions for voice transcription and request processing.

The best way to approach this stage is to contact a reliable software development partner familiar with the banking industry and voice technologies. Thanks to their niche expertise, such teams can advise you on the most efficient software and hardware solutions to achieve your goals.

Ensuring Integration with Core Banking Systems

Finally, remember about connectivity to your existing system. To rephrase, all your previous choices and decisions make no sense if your current banking system doesn’t support such services.

There are plenty of reasons why such an issue might occur. For example, you might use an outdated software system and legacy infrastructure, a lack of APIs, or even regional and international security and compliance regulations.

Thus, you should consider these possible issues during every preparation stage, considering all pros and cons, potential challenges, and ways to overcome them. If you haven’t defined any possible problems that couldn’t be fixed, you can proceed to the software development and implementation stage.

Security and Privacy in Voice-Enabled Banking

The software development industry already has many regional and international regulations. Yet, software development in the banking industry is even more complicated because the financial field has its own restrictions and laws related to multiple aspects that must be followed.

So, when creating a voicebot in banking, you must follow GDPR, CCPA, GLBA, and probably FFIEC Guidelines. Frankly, most laws and restrictions are primarily related to private data or vulnerable information and their protection.

If you cooperate with experienced and trustworthy software developers, you don’t need to worry: they have already worked with most such laws and know exactly what they can and can’t do.

Still, there are some concerns about the overall security practices. It is hard to tell whether enabling advanced voice-operated functionality without extra steps is a good idea. Most STT solutions show astonishing accuracy at 90-95% voice recognition. However, even these 5-10% are still too much under certain circumstances.

Alternatively, these technologies are improving, so accuracy continues to grow. Moreover, solutions like voice biometrics from PrivatBank are an excellent extra feature and use case for integrating voicebots in banking.

To be honest, the overall security and privacy of voice-enabled banking are blank pages: there are just a few successful existing cases that have hardly been explored. Due to the lack of data, it is hard to talk about such software solutions' overall security or vulnerability.

The Future of Voicebots in Banking

Despite all the foregoing, we can confidently state that the number of successful voicebots in banking will grow over time. Such solutions offer too many features and benefits to be ignored. Besides, the variety of modern technologies also grows, providing software developers with new and useful instruments for incorporating voice AI in banking or implementing other convenient tools for customer services.

So, don’t waste your time. Start discovering the possibilities of voice assistants in the banking industry today with the help of experienced software developers like Incora. All you have to do is send us the details of your idea for a future project, and we will gladly estimate and advise you on your next steps to implement it.