EXPLAINER: How can chatbots be a crucial point in development of financial strategies – The Financial Express

The ‘bot’ factor!

Going by market reports, the biggest advantage of having chatbots is the ability to get 24×7 service, as users can get financial advice beyond business hours. In terms of other related benefits, chatbots can execute tasks without the need for agents, along with providing other facilities such as automation, enhancement in revenue, and increase in customer accounts, among others. As per a recent report on Medium, financial chatbots can enable corporations to earn a 30% reduction in customer service expenses. As per REVE Chat, an AI-backed live chat, 43% of banking customers would go for a chatbot to provide solutions for their problems. 

In terms of what market experts suggest, conversational AI’s influence is considered the value adding factor for the financial landscape. Market-oriented research has shown that chatbots for financial assistance can benefit different operations, namely fraud recognition, money management, immediate loan authentication, mortgage management, tax-oriented services, financial portfolio handling, among others. “I believe chatbots are revolutionising the finance sector by providing customer service, automating routine tasks, and enhancing user experiences. With advancements in natural language processing and AI, chatbots seem to be becoming more adept at understanding financial queries,” Alankar Saxena, CTO, Mudrex, a crypto-investing platform, specified. 

Currently, OpenAI’s ChatGPT is seemingly making its mark in the financial sector, with different corporations adopting it for e-commerce needs. So, how does it financially function? Well, ChatGPT enables businesses to develop reports and dashboards, keep record of expenses to create budgets, and generate data based on financial statements, cash flow records, M&A, balance sheets, among others. Numbers provided by Vena Solutions, an online intelligence platform, mentioned that in August, 2023, it was estimated that ChatGPT comprised nearly more than 100 million users, with over 13 million unique users visiting ChatGPT on a daily basis. Research provided by Dresner Advisory Services, a business intelligence firm, found that 56% of corporations still make use of spreadsheets as a company-oriented application for analysis. In that context, ChatGPT can ensure creation of formulas to execute mass calculations, as well as convert data into charts and graphs. “OpenAI’s ChatGPT seems to have brought a transformation to the landscape of AI-driven conversational agents. The versatility and robustness of ChatGPT’s engine can enable businesses to tailor chatbots for various industries,” Saxena added.

The ‘bot-driven’ finance sector!

According to Next Move Strategy Consulting, a market intelligence provider, the international chatbot in BFSI market was valued at $890 million in 2022 and is expected to reach $6170 million in 2030, at a 27.4% compound annual growth rate (CAGR) between 2023-30. A survey conducted by Tidio, a CRM software company, showed that chatbot adoption is witnessing an upward trend across different business sectors, namely 22% for micro-businesses, 20% for small businesses, 12% for large businesses, and 11% for medium-sized businesses. The survey also highlighted that in the next couple of years, the provided numbers will increase to 43%, 60%, 71%, and 80%, respectively. 

Reportedly, the trend of banks inculcating AI-based chatbots for their operations has already started. In 2023, developments happened over JPMorgan Chase’s, a financial services company, unveiling of an AI-based chatbot, called IndexGPT, to assist customers with investment-oriented matters. While the corporation applied for IndexGPT’s trademark in May, 2023, sources suggest that the chatbot will utilise cloud computing to go through securities and suggest customers the most appropriate ones. In a blog post, Lori Beer, CIO, JPMorgan Chase, spoke on how the company aims to make use of GPT and other large language models (LLMs) for increasing the company’s market value. 

Other companies such as India’s Tata Mutual Fund entered into a partnership with Haptik.ai, a conversational AI platform, over an easy-to-use platform for solving financial queries and bettering customer experience (CX). For example, Tidio makes use of AI-oriented chatbots to enable financial platforms to record an increase in sales and better customer service. Data published by ClearTouch, a technology company, showed that Bank of America’s Erica, an AI-powered chatbot, recorded over one billion client interactions. The company also stated that India’s HDFC Bank grew its lead generation methodology by 30 times using an AI-powered chatbot. “As we look ahead, the future of chatbots in financial investment strategies is promising. These intelligent systems, with predictive analytics and extensive historical data, should deliver personalised investment strategies tailored to the unique needs and preferences of each individual. Chatbots in the future should analyse user behaviours, preferences, and financial goals,” Akshar Shah, founder and CEO, Fixed Invest, a fintech startup, concluded. 

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