How Can Traditional Banks Challenge the Fintech Space With Conversational AI?

In today’s highly digitized business landscape, customers have come to expect seamless engagement across the broad spectrum of banking and financial services. More than two years into the pandemic, thanks to powerful advancements in artificial intelligence, automation, machine learning, blockchain, and other technologies, a new wave of digitally-enabled financial firms have taken the entire banking industry by storm.

Fintech firms, also known as the digital challenger banks (Venmo, CashApp, PayPal), have quickly exploited traditional banks’ inability to scale up their digital transformation initiatives. Long branch queues, highly complex application forms, cumbersome login procedures, stringent guidelines, and inconsistent banking portal designs for different use cases have deterred customers from engaging with traditional banks.

Instead, banking customers have now made a steady move toward fintech firms providing an easy, cohesive, and well-designed suite of online and mobile banking services. From opening a bank account to making immediate peer-to-peer transfers to shopping online, executing international transfers, or making contactless payments, the ability to effortlessly perform common banking tasks from the convenience of one’s home and at the fingertips has made third-party fintech services a go-to choice for the younger, new generation of customers.

Research shows that 88% of incumbent financial institutions believe that part of their business will be lost to standalone fintech companies in the next five years.

However, all is not lost for traditional banks. To ensure frictionless banking experiences, reduce customer dropout, and build unified digital banking practices that can help traditional banks challenge fintech firms, it’s time to adopt conversational AI in banking, more popularly known as conversational banking.

Let’s explore more.