March 6, 2023

What is conversational banking and how can it help SME financial institutions?

The banking industry has seen conversational banking playing an increasingly important role in how they interact with customers.

Conversational banking is a whole new approach to customer service that's gaining traction in the financial services industry. It refers to using artificial intelligence (AI) to provide automated customer service via web, app-based social/OTT chatbots such as WhatsApp and natural voice-based intelligent virtual assistants (IVAs) such as Siri, Alexa, and Google Assistant.

These systems are designed to respond quickly and accurately to customer inquiries, allowing banks, microfinance, insurance, lenders, and cooperatives to provide personalized service without hiring additional human agents.

The best part of this is that you don't need an IT team or technical knowledge to implement a top-notch conversational banking system into your operations. Providers such as Bankingly can integrate, at low cost, with existing systems and communication channels such as WhatsApp, Telegram, Instagram, SMS, FB Messenger and Twitter. By being at the intersection of messaging apps, customer service, and online retail by which end users of conversational devices, such as smartphones, kiosks, and laptops it improves customer service.

The global spend for conversational commerce over OTT channels such as WhatsApp that complete in-app purchases, alerts, self-service, and customer support are set to grow from $13.3 billion in 2022 to $25.1 billion in 2023 at a growth rate of 89%. This is driven by e-commerce and fintech, where the increased online presence and need for better customer experience exist.

Benefits to customers:

1) For starters, it's incredibly efficient; AI-powered bots can handle multiple customer queries simultaneously, meaning banks can provide faster responses 24/7 whenever customers need it.

2) Conversational banking helps customers whenever or wherever they need it. Gone are the limitations of branch hours, betting put on hold for minutes. By using natural language queries, customers don't need to fill in forms or wait for responses. It also makes the support agents more productive and does their jobs better so they can focus on more urgent requests. This way, they can only manage escalations, complex proposals, and building customer relationships.

3) It allows consumers to get answers quickly without waiting, being kept on hold, or speaking with a live representative. This can be useful for customers who need urgent help outside regular business hours, live in remote locations (where no branches are nearby), and for emergencies, as chatbot systems can be available 24/7.

4) Additionally, AI-based systems can learn from patterns in customer behavior and offer more tailored advice than traditional customer service models. This can lead to higher customer satisfaction and better engagement with their bank.

How can it help SME financial institutions?

  • Tailored services: Conversational banking solutions offered by providers like Bankingly allow banks to deliver personalized services to meet their customers' unique needs.

  • Reduces costs: By helping customers help themselves, conversational banking provides self-service. It reduces the huge overheads of hiring as customers can tap into the knowledge base, frequently asked questions, and manage most common, routine tasks such as checking account balances, making transfers, getting alerts, updating customer information, applying, and even getting approvals for new products based on credit scores.

  • Insightful data: Through better data collection and analytics, it helps businesses better understand customers' banking habits, usage, behavior, preferences and gives better feedback eliminating any bottlenecks. This data can improve scores like NPS and CSAT banks can develop products and services faster and increase profitability.

Can conversational banking replace humans?

The idea behind incorporating conversational banking into a bank's operations is not to replace human customer service representatives but to complement them. While automated solutions offer quick and efficient responses, human employees bring empathy, personal touch, and the ability to handle complex and sensitive situations with tact that can't be matched by technology at this stage. However, conversational banking technology will play an increasingly important role in the future as banks strive to improve their services and provide fast and high-quality customer care in a streamlined manner.


Conversational banking technology from vendors such as Bankingly provides SME financial institutions with an efficient way to respond to customer queries and provide round-the-clock assistance.

Although AI-powered automation can assist human representatives with routine and operational cases, it cannot fully replace them, especially when it comes to more complex customer conversations that require human review and understanding of context and nuance. Conversational banking should be seen as a complement rather than a replacement.

With advances in AI continuing at breakneck speed, we expect this technology to become more widespread in the coming years —ushering in a new era of personalized financial services that deliver more value than ever.

Stay ahead of the curve with Bankingly's conversational banking solution. Offer the best possible service to your customers today.

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