Advancements in technology over the last decade have propelled the banking industry forward. When looking back at the evolution of the way we bank, we’ll notice that we’ve moved away from brick-and-mortar to a self-service model.
- In the 1970s, technology and computers were introduced as a new alternative to traditional banking.
- In the 1980s, technology started to evolve, and ATMs were introduced – in addition to computer banking – as a high-tech solution to meet people’s needs.
- The introduction of mobile phones in the 2000s brought us mobile banking – accessing your account information and completing transactions on the go.
Each of these iterations are connected to the technology trends that surfaced during that decade.
So, the question we ask ourselves now is what’s the next step in the evolution of the banking customer experience?
The introduction of chat apps
The continuous updates being made to smartphones have led to a lot of new buzzwords that could potentially become the next wave of banking services: voice banking, watch banking, some even say refrigerator banking is a possibility.
Although these are great, forward-thinking ideas – they might not be revolutionary to the banking industry.
If we look back at the technology that transformed banking over the years, there is one common denominator – data connectivity. It has never been easier to stay connected in every corner of the world, and in most cases, for free. You can be in an aluminum box 10,000 feet above the ground and still communicate with your friends and family. When you think about it, that’s pretty awesome!
This transfer of data is what has enabled us to communicate instantly over one of the greatest tools available on smartphones – chat apps. Chat apps – such as WhatsApp, Viber, WeChat, and Facebook Messenger – are used all over the world. These are the tools that are transforming our era.
What is chat banking?
Chat banking is the act of performing banking services over chat apps, such as:
- Checking your account balance
- Transferring funds
- Asking for additional information about a topic that pertains to your needs (e.g. mortgage rates, student accounts, etc.)
- Quickly receiving in-depth information (e.g. loan pre-approval notifications, credit card limits, etc.)
So, why use chat apps in addition to mobile banking apps?
The goal of chat banking is to save clients time and to provide detailed information in the most convenient way possible. For some, downloading an additional app isn’t an option due to low mobile phone storage space – while for others, additional assistance helps reassure that they are on the right track to completing big purchases or planning for many of life’s milestones.
Since chat apps offer instant, contextual, and personalized communication, clients can contact agents or chatbots over one platform where conversation history is saved and can be referred to later. This saves them from tediously scanning through websites and apps, or waiting on hold to speak to a live agent, for an inquiry they’ve looked into previously.
Some banks have already adopted the new technology, however, many can’t deliver personal banking information over these apps due to lack of authentication. So, the future of chat banking lies in services that can help banks authenticate their chat contacts – the way PINs are used to authenticate mobile banking app users.
Nonetheless, the benefit of banking using chat apps is based on letting your customers reach you whenever and wherever they may be. This will help build trust that is required for successful long-term client-bank relationships.
Chat banking in different regions
The scenarios for which chat banking is used is highly dependent on the region.
In regions like Africa, where the population is accustomed to banking with channels like USSD and SMS, chat banking is viewed as a quick and simple solution to perform daily banking activities – like transferring funds and checking account balance.
In most African countries today, you can pay with your phone almost anywhere – without the use of data. However, a recent GSMA study shows that the mobile broadband connection is set to increase by nearly 50% by the year 2025. So, as data connectivity grows in this region, the road to chat banking usage is being paved.
But what about the rest of the world? Is chat banking something that will pick up in places like France, Sweden, or the United States?
In regions like Europe, the focus is on using chat banking for in-depth support – such as receiving loan pre-approval notifications – in addition to using mobile banking apps for fund transfers and account balance inquiries.
Better Banking Through Better Communications
We live in a time where fast, convenient, and simple services are not only superior but are expected. Chat banking is one way that can improve the way banks deliver their services to clients in regions like those listed above. As technology continues to advance, each era will have its own tools and best practices to make the most of these advancements – as customers’ expectations change, banks will need to adapt. Chat banking is the new phenomenon of our era – the question isn’t will you adopt this new technology, but when?
To learn more about how advancements in technology are influencing the way we bank, download our eBook: Better Banking Through Better Communications.