Consumer banking around the world is in crisis. Banks around the western world are closing branches, reducing services and moving to a digital-first customer service model. That’s to counter the rise of startup online-only banks and to preserve their profits as consumer banking becomes a commoditized and nearly worthless endeavor.

The best customers for banks are those deep in debt, always paying fees and interest. Not a pretty picture and one that’s hard to market. No wonder most banking adverts are ethereal or aspirational. And, as people invest better in property, stocks and so on, there’s less money sitting in banks for them to invest, a spiral that is only tightening. People also talk to their bank less often, they are less engaged by advertising and use apps in greater numbers and frequency.

All of which sees a chatbot playing a greater role in customer services and interactions. HSBC has Amy, HSBC China uses Xiaohui for local customers, Bank of America has Erica, and most Chinese and Indian banks lead their offering with a bot to deal with millions of requests.

Banks Are Changing For All

Around the world, banks have very different ways of operating, France and most European countries charge an annual fee for banking, regardless of if the customer is in credit or not. In the UK, “free” banking has been under pressure for years, and we’re coming to the point where there are only so many more branches that can be closed in the name of economy.

In America, the check (cheque) is still hugely popular and chip-and-pin is still being rolled out, a decade after Europe. In the US, most banks charge monthly fees unless the account holder pays in regularly and stays in credit. Moving with the times doesn’t necessarily mean modern banking, but a bot can help.

Further around the world, record numbers of Africans, Indians and Chinese are becoming working class earners or entrepreneurs, exposed to modern banking and taking a mobile-first approach due to the huge numbers involved and the rarity of bank branches. According to the China Banking Association, nearly 90% of banking transactions were completed without customers visiting a bank counter last year.

Since the rise of Internet banking, customers have found it easier to move their money around, switch accounts, switch insurances and credit card or loan deals. All of this puts pressure on the banks, which is why chatbots as a customer service tool are such a popular new feature.

Not only can bots handle a range of transactions when operating behind the bank’s firewall, they can attract new customers, help people switch their accounts and encourage other actions. This can make the bank appeal to younger bankers more likely to switch accounts (old people just don’t do that or aren’t online, apparently).

Bots are increasingly multilingual to cope with the global market and can perform the usual customer services chats. That includes identifying what people need to set up accounts, providing IBAN numbers and other details that customers can have a hard time finding among others.

Banks Need to Appear Less Bank-Like

In Hong Kong, the Hang Seng Bank has a pair of bots, Haro and Dori, powered by machine learning technology. Haro appears on the bank’s mobile app handling day to day queries and transactions, Dori appears on the bank’s Facebook page and offers wider features like discounts for eating out and other recommendations.

This twin approach is something more banks are likely to do with bots, making people more likely to use the bank’s apps or social media, to use their account to pay for extras and services, and to raise the bank’s profile beyond being just another way to move money.

There’s no reason why banks can’t create their own shopping portals or partner with the likes of eBay and other retailers to offer custom stores and special deals, but the chatbot will be a key way to attract customers to these new locations.

Banks will also look to chatbots for internal communications to streamline their business messaging, make HR easier and friendly to engage with and handle other functions. Swedish bank SEB rolled out Aida for its workers in 2017 and helps with thousands of queries from workers.

However banking changes, in the near future all banks and consumer-facing financial operations will be looking to chatbots to help make processes easier, add a smiling, always-available face for the bank. While most banks will need to maintain human customer support for complex issues, newer banks can operate with digital-only customer support for the majority of issues, as people get used to their phone or notebook screen becoming the new face of their bank.