Skip to main content

Chatbots Deliver Lasting Benefits for Financial Services

Ever since the advent of computer use by established banking and insurance organizations in the early 1950s, financial services has been a sector that generates an enormous amount of customer transaction data.

That's why they've adopted analytics tools for big data use cases, and it's why they've been one of the first sectors to pilot the deployment and applications of artificial intelligence (AI) systems.

AI Chatbot Market Development

According to the latest worldwide market study by Juniper Research, the operational cost savings from using chatbots within banking will reach $7.3 billion globally by 2023 -- that's up from an estimated $209 million savings in 2019.

This tremendous productivity improvement represents 862 million hours potentially saved for banking business operations by 2023 -- that's equivalent to nearly half a million working years.

According to the new research, chatbots can now reduce excessive operational costs in financial services organizations, by resolving customer support requests in a fully automated way.


As Natural Language Processing (NLP) capabilities evolve and domain expertise is added to AI systems, chatbots are demonstrating a proven record of end-to-end service delivery, which will drive adoption by even the most skeptical legacy financial institutions.

This anticipated productivity advancement is reflected within the forecast growth of nearly 3,150 percent in successful banking chatbot interactions conducted between 2019 and 2023.

According to the Juniper assessment, chatbot integration in mobile banking software apps will be the dominant channel for chatbot-driven customer communications, accounting for 79 percent of successful interactions during 2023.

This dominance is due to several reasons, primarily an increase in user preference for app-based banking, as well as the strong performance of early banking chatbot deployments -- such as Bank of America’s 'Erica' chatbot.

"Chatbots in banking allow heavily automated customer service, in a highly scalable way. This type of deployment can be crucial in digital transformation, allowing established banks to better compete with challenger banks," said Nick Maynard, senior analyst at Juniper Research.

Outlook for Chatbot Automation Apps

The market study also uncovered that AI, including chatbots, will have a highly disruptive impact on insurance claims management, leading to cost savings of almost $1.3 billion by 2023 -- applied across automobile, life, property and health insurance, that's up from $300 million savings in 2019.

Chatbots can automate post-incident data collection, with AI used to analyze the details or images provided using computer vision. These methods will not only save money for insurers, but they will also reduce time to claim settlement, and potentially improve customer loyalty.

Popular posts from this blog

How a Digital-First CEO Leads Transformation

Some leaders reject the notion that "wait and see" is the best response to disruptive change. Savvy senior executives are already driving digital business transformation throughout their organization in an effort to gain a bold strategic advantage. According to the latest market study by International Data Corp (IDC), Digital-First CEOs plan to drive at least half of their income from digital business products, services, and experiences by 2027 -- that's ahead of the market average of 39 percent. Driven by their response to the COVID-19 pandemic, these business leaders have changed how they think about the relationship between business and technology, and how they approach the next digital transformation era -- from scaling digital technology to guiding a viable digital business. Digital Business Market Development IDC defines digital business as value creation based on technology, which entails: 1) Automated customer-facing processes and internal operations; 2) Provision

Digital Solutions for Industrial & Manufacturing Firms

Executive leaders of fast-moving consumer goods (FMCG) are seeking guidance on how to apply new business technology in their manufacturing operations. CIOs and CTOs are tasked with gaining insight into the best solutions for digital transformation. ABI Research evaluated the impact politics, regulation, the economy, supply chain, ESG, and technology are having on FMCG, pharma, producers of steel, chemicals, pulp and paper -- as well as the mining and oil & gas sectors. Digital Transformation Market Development "Our assessment found that the FMCG sector is under pressure from all sides," says Michael Larner, industrial & manufacturing research director at ABI Research . Securing raw materials is challenging considering lockdowns in China and limited grain supplies from Ukraine. Supply shocks are raising input costs, and operating costs are rising with higher energy costs coupled with the pressure to pay higher wages and work sustainably. "We all hoped that with th

Retail Transformation Gains New Momentum

Forward-thinking retailers now have a bright future. In contrast, those that failed to enhance their business model via digital transformation have struggled, declined, and their assets were eventually liquidated. The key difference between these two business outcomes is applied strategic foresight. Even as the world continues to emerge from a global pandemic, retail is growing at levels not seen in the last two decades. Retail sales grew by 7 percent in 2020 and by over 14 percent in 2021, which is in stark contrast to the 3.7 percent annual growth between 2010 and 2019. The increased demand for retail has put a strain on supply chains and retail operations worldwide. As a result, retailers and stakeholders are turning to automation solutions such as mobile robotics for operational ease. Retail Transformation Market Development According to the latest market study by ABI Research, worldwide commercial robot revenue in retail stores will have a Compounded Annual Growth Rate (CAGR) of o