The Ultimate Guide to Conversational Banking

8 min read

Technology solves problems. And then, it creates new problems for new technologies to solve. It’s a pattern seen across nearly every industry, but none more, perhaps, than banking.

Take the credit card, for example. Remember the progression from swiping to inserting your chip? Now, all it takes is a simple tap of your card (or your phone) to make an in-person purchase. All three iterations of the same product were striving towards one common goal: convenience.

Emily R.
Emily R.
Published November 10, 2021
Conversational Banking

This guiding tenant has worked its way into the customer support space, creating the concept of conversational banking. The biggest challenge facing banks today is customer retention. Customer acquisition costs (CAC) are at a record high, and so are their expectations. Our culture prizes connectivity and convenience above all, from how we swipe (or don’t) our credit cards to how we interact with customer support. The pressure for banks to retain customers, exceed their expectations, and innovate is on, and conversational banking is the answer.

Although artificial intelligence (AI) has penetrated the financial sphere, self-service is still a major component of a holistic banking experience. This article covers the basics of conversational banking, typical use cases, and more.

What is Conversational Banking?

Conversational banking combines chatbot and live, in-app messaging technology to create one dynamic self-service channel for customers to leverage when they have questions or need assistance. This method of customer support aims to reduce the number of touchpoints a customer must take to complete a goal. While text-based messaging is a core tenant of this experience, it’s important to note that conversational banking is a broad concept and encompasses a scope of communication methods that extend beyond traditional text-based chat.

The goal of conversational banking is to bridge the gap between convenience and personalized customer service.

When successfully achieved, this goal benefits both the bank and the user. Banks see increased customer engagement metrics, a reduction in errors, and more productive employees. Conversational banking users enjoy 24/7 support, multilingual options, and more helpful answers to their questions. As banking institutions scale their conversational banking efforts, they can gather critical data on customer goals, financial behavior, intentions, and desires to inform their cross-selling and upselling strategies.

Discover the Technology Behind Conversational Banking

Conversational banking has evolved beyond rudimentary chatbot technology. To combat formerly frustrating “yes/no” text exchanges, conversational technology now leverages live, chat to power more dynamic discussions and incorporate human assistance as needed.

Messaging apps like WhatsApp and Facebook Messenger share similar functionality. Users can upload attachments, interact with buttons, share videos, and even transact directly within a conversational banking interface. The companies mentioned above have teams appropriately sized to support the development and maintenance of in-app chats at this scale. However, you can easily outsource this costly, highly technical, and time-consuming effort to a third-party vendor and be white-labeled for your app.

Why Use Conversational Interfaces?

The ultimate goal of conversational banking is to provide a natural and convenient customer service experience. The nature of this service is highly subjective, so keep in mind that what some users consider to be seamless might not be the right fit for others.

Benefits for Customers

The beauty of conversational banking is that you’re able to cast a wide net and offer variety. But at the same time, you’re not reinventing the wheel. Even though conversational interfaces span across the realms of in-app messaging, video chat, voice messaging, and SMS text, users are already familiar with these tools, guaranteeing easy adoption.

Benefits at a Glance:

  • 24/7 support
  • Accessibility friendly
  • High-quality service
  • A hybrid approach to support
  • Multilingual capabilities
  • Personalized communication
  • Proactive engagement and outreach

Benefits for Banks

Banks can afford to act more strategically and increase employee productivity by using conversational interfaces. Since conversational banking takes a hybrid approach to customer service (split between bots and human assistance), customer service representatives will have more time to influence other business areas where their efforts can make a bigger impact. Another major bonus banks gain from conversational interfaces is a reduction in customer churn rates. Conversational banking resolves most queries in under two minutes, making customers happy and bottlenecked processes a thing of the past.

Benefits at a Glance:

  • Increased automation
  • Error reduction
  • Lower churn rates
  • Attracts a broader customer base
  • Greater business flexibility

Typical Use Cases for Conversational Banking

Conversational banking relies on multiple channels to house communication and move the user through their unique customer journey.


Chatbots are a cost-efficient, self-service technology perfectly suited to resolve low-stakes customer issues. In a conversational banking experience, customers can start their request with a chatbot and then escalate the case to a customer support agent if need be. The agent has access to the customer’s preliminary data submitted to the chatbot, expediting the resolution process.

The primary use case for a customer service chatbot is to resolve simple, recurring issues. They typically relate to password recovery, card lock/unlock, and locating the nearest ATM. These queries can be answered with a formulaic response and do not require the time and attention of a customer support agent. Another benefit of using chatbots in these instances is that they can offer immediate assistance, crucial in urgent situations.

Live, In-App Chat

The ability to directly message a customer support agent provides a seamless and intuitive customer experience. Customers and agents can message each other in real-time. This gives the interaction a personal touch and typically results in the customer feeling more understood than if they were to interact with a chatbot. The bank benefits by offering live customer service because of the customer-centric environment it creates, which supports its ultimate goal of retention. The most common use case for live, in-app chat is to dig into a more advanced banking question or inquiries about upgrading accounts.


Video can be a powerful tool within the conversational banking experience, especially when it comes to onboarding and financial advice. There’s nothing quite like speaking face-to-face, or rather, screen-to-screen to build a sense of empathy and trust with a customer. Whether it’s a financial advisor, banker, or customer support agent on the other line, putting a face to a name when discussing personal finance matters offers more value to a customer than a text-based message. Everyday use cases for video in conversational banking often revolve around financial advice and customer onboarding. These videos can be live, scheduled appointments, or pre-recorded onboarding demos.

How to Design A Conversational Banking Experience

1. Map Out Your Customer Journey

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The first step to designing your conversational banking experience is to map out your ideal customer journey and determine the most common questions likely to arise at each stage. This exercise helps you understand which points of your customer journey can be handled by chatbots and which points require human assistance.

Start by outlining three broad categories of customers and predicting some of their queries:

  • Prospects: general inquiries, e.x. "what ID do I need to set up a new account?"
  • New customers: onboarding and application requests, e.x. "how do I invest?"
  • Established customers: transaction and account services, e.x. "how much did I spend last month?"

Once you list down your predicted queries and filter and automate the repetitive questions by deploying a chatbot, the bot will always be available to handle the FAQs and increase engagement.

Then move on to identifying key touchpoints. Banks must identify all potential touchpoints a customer might have to deliver a consistent, omnichannel UX across all of its channels.

2. Outline the Areas Requiring Human Assistance

Turn your focus towards your website, mobile, and messaging apps. Move through your customer journey as if you were a new visitor to identify friction points that soften with human interaction.

For example, your website visitors will most likely be prospective customers. To convert them, dedicate customer support agents to monitor that channel for those in need of assistance. Proactively reaching out to answer any questions or clarification will set your conversational banking experience apart from a traditional banking site.

3. Choose a Conversational Platform

When approaching the inevitable buy vs. build dilemma, be sure to ask yourself the following:

  • How quickly do I want to go to market?
  • How scalable do I need this solution to be?
  • How much maintenance am I willing to perform?
  • Am I able to provide the level of security a conversational banking experience requires on my own?

If you want to decrease your time to market, grow your customer base, oversee little to no maintenance, and be able to meet rigorous security standards on your platform, buying a messaging API is the way to go. You’ll be able to rapidly ship the chat component of your banking app with a solid infrastructure and help from your choice of SDK. Not only will opting to buy rather than build your in-app messaging ease the development burden for your team, but you’ll also have a proven chat solution that will drive more conversions, increase user engagement, and reduce churn.

4. Safeguard Customer Data

Banking is a highly regulated industry, so security and data protection should be top of mind when creating a conversational banking experience. The sensitive nature of information shared within these environments makes them a target for security threats, meaning meeting compliance standards are nonnegotiable. The whole point of a conversational banking experience is to gain and maintain trust with your customers; data breaches can reverse any trust-building efforts that precede them.

5. Measure Your Success Across Channels

Without completing this final step, designing a conversational banking experience is all for not. Identifying goals for your new approach to banking is essential to do before implementation. Then, after a significant period passes, you can compare the customer data you collected to your baseline metrics. Do the same for employee feedback and experience by conducting internal surveys.


1. What is conversational banking?

Conversational banking is an innovative self-service channel that combines artificial intelligence (AI) with machine learning (ML) to communicate with customers. The focus of conversational banking is on assisting customers through natural conversation. The ultimate goal of conversational banking is to streamline the customer journey and improve UX by reducing the number of actions a customer must take to complete a goal.

2. What is the difference between a chatbot and conversational AI?

Chatbots are the predecessors of modern conversational AI and follow tightly scripted, keyword-based conversations that help users navigate an app or website. Chatbots are less useful for conversations that require them to understand what customers are saying and offer dynamic responses intelligently. Conversational AI provides rapid, appropriate responses to customers to help them get what they want with minimal fuss and a better customer experience.

3. What are conversational platforms?

A conversational platform is a type of artificial intelligence (AI) technology that allows people to interact with software to mimic human conversation. Businesses integrate these platforms into their website, apps, social media, and SMS marketing strategies to improve customer experience, reduce churn, and increase automation.

4. Who uses conversational AI?

Businesses in almost every vertical use conversational AI for marketing, sales, and support to engage along the entire customer journey.

The Future of Conversational Banking

The banking industry is experiencing a renaissance. Technology that powers Robo investing, budgeting, and banking apps are advancing at alarming rates, with customer expectations following suit. The demand for a dynamic, digital customer experience has pushed conversational banking into the forefront of FinTech industry trends. Its elegant combination of AI and human assistance allows developers to strike the balance that works best with their app and for their customers.

Democratizing automation is a theme seen throughout every industry right now because of its time-saving, cost-minimizing, and error-reducing benefits for businesses.

Those coupled with record-breaking time-to-solution metrics, more intuitive user engagement features, and personalized customer support signifies that the growth of conversational banking is imminent. As the space grows and you collect customer feedback at scale, conversational banking will continue to be refined by developers, beloved by users, and a hallmark of every digital banking experience.

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