# The New Age of Cognitive Chatbots in Banking Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2019-01-30 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: Revolutionising Customer Experience with Cognitive Chatbots Meta Description: Explore the evolution of chatbot technology from clunky assistants to cognitive virtual agents enhancing customer service in the banking sector. URL: https://financedigest.com/new-age-cognitive-chatbots-bankinghtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/the-new-age-of-cognitive-chatbots-in-banking-1736839179747-compressed.jpg) Technology is transforming the way we bank with smartphones and apps taking the lead as the key platforms. With the banking experience changing fast in favour of speed, ease and control for customers, another area that needs attention is customer service.  As customer service is a primary touchpoint between any organisation and its customers, it is essential that this side of the business should run like a clock with delays in responses, long waiting times and lengthy resolution processes being ironed out. [Chatbots have been deployed to smoothen the edges of customer](https://www.financedigest.com/chatbots-the-secret-weapon-to-customer-engagement.html "Chatbots: The secret weapon to customer engagement?") experience, providing fast and easy resolution to customer enquiries. Deploying chatbots in [customer service](https://www.financedigest.com/transforming-to-customer-centric-service-in-financial-services.html "Transforming to customer centric service in Financial Services") brings significant benefits to banking institutions, including resource and time efficiencies and increases in productivity. But while chatbot [technology brings](https://www.financedigest.com/the-digital-ir-revolution-how-new-technology-is-bringing-companies-and-shareholders-closer-together.html "The digital IR revolution: how new technology is bringing companies and shareholders closer together") a lot of potential to banks and customers alike, not all chatbots deliver the quality of customer experience and service that today’s consumers expect. Below we look at different chatbot deployments and discuss why cognitive and voice technologies like [Artificial Intelligence](https://www.financedigest.com/artificial-intelligence-in-banking-magazine.html "Artificial Intelligence in Banking Magazine") (AI) and Machine Learning (ML) transform customer engagement. **Chatbots’ bumpy start** ![Mark Troester](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/mark-450x553-1736839179734-compressed.jpg) Mark Troester Chatbots have been around for decades, therefore, the idea of them acting as a [customer service](https://www.financedigest.com/financial-services-is-upping-its-customer-experience-game.html "Financial services is upping its customer experience game") assistant is nothing new. However, they did not have the most impressive journey in the customer [service sector](https://www.financedigest.com/the-state-of-cybersecurity-in-todays-financial-services-sector.html "The state of cybersecurity in today’s financial services sector"), often described as clunky, hard to work with and one-way thinking. This can be traced back to traditional chatbots being programmed with predetermined decision trees that only allowed them to perform a narrow set of actions. In addition, as this [type of chatbots were typically not connected to backend systems](https://www.financedigest.com/turbo-compounding-systems-market-development-status-competition-analysis-type-and-application-2026.html "Turbo Compounding Systems Market Development Status, Competition Analysis, Type and Application 2026"), they could only draw on limited enterprise datasets to inform their decisions. Finally, a common cause of frustration had to do with their conversational capability. Stiff language and responsiveness [limited to just simple keywords meant that this generation of chatbots was not able to hold natural flowing conversations with customers](https://www.financedigest.com/natwest-limits-customers-crypto-transfers-citing-scam-concerns.html "NatWest limits customers’ crypto transfers, citing scam concerns") or understand any requests or prompts outside of what they were programmed to. This resulted in customers’ inquiries and demands not being met, leaving the staff to [resolve issues](https://www.financedigest.com/apple-says-issues-with-imessage-facetime-resolved35792.html "Apple says issues with iMessage, FaceTime resolved") while dealing with frustrated customers. **Cognitive chatbots** [change the game](https://www.financedigest.com/how-technology-is-changing-the-game-in-construction.html "How Technology is Changing the Game in Construction") Thanks to cognitive technologies like AI and ML, as well as natural language programming (NLP), the functionalities of chatbots have changed dramatically. Chatbots are no longer defined by a narrow set of pre-programmed answers and [limited data](https://www.financedigest.com/omicron-poses-very-high-risk-but-data-on-severity-limited.html "Omicron poses ‘very high’ risk but data on severity limited") access, as their cognitive capabilities give them the edge their predecessors lacked – and this is only the beginning. Modern chatbots are far more proactive and truly cognitive. They can learn from previous interactions and [leverage backend data to personalise their engagement with the individual customer](https://www.financedigest.com/how-payment-institutions-can-leverage-data-to-support-merchant-customers.html "How payment institutions can leverage data to support merchant customers"). Cognitive chatbots [offer round-the-clock support and can even predict possible future](https://www.financedigest.com/surgical-equipment-market-high-trend-opportunities-offers-future-business-growth-by-2030.html "Surgical Equipment Market High Trend Opportunities Offers Future Business Growth by 2030") enquiries based on the user’s history and engagement patterns. With ML technology, chatbots can not only gain new levels of flexibility and complete complex tasks, but also no longer need constant [fine tuning](https://www.financedigest.com/fine-tuning-your-money-management-skills-today.html "Fine-tuning your money management skills today") from developers as they constantly learn through customer engagement.  By introducing a conversational user interface (UI) into the application, chatbots are able to hold human-like conversations that feel natural to customers. In addition, multilingual chatbots that are able to communicate in the [customer’s preferred](https://www.financedigest.com/walk-in-coolers-and-freezers-market-preference-for-customized-and-smart-machines-growing.html "Walk-in Coolers and Freezers Market: Preference for Customized and Smart Machines Growing") language can not only overcome linguistic and geographical constraints but also deliver a much more enjoyable user experience. This is not to [say that a chatbot as a customer services](https://www.financedigest.com/uk-says-baker-hughes-altus-deal-may-hurt-competition-in-oil-well-services.html "UK says Baker Hughes-Altus deal may hurt competition in oil well services") agent will make the position of human agents obsolete. On the contrary, cognitive chatbot deployments can empower customer agents as a big volume of customer queries will be dealt with without their input. This will enable the staff to take care of more pressing issues which require more time and attention and [cut down costs](https://chatbotsmagazine.com/how-with-the-help-of-chatbots-customer-service-costs-could-be-reduced-up-to-30-b9266a369945).Cognitive chatbots are low maintenance, low [cost but high value](https://www.financedigest.com/back-to-basics-for-cost-control-as-the-usual-levers-lose-value.html "Back to basics for cost control as the usual levers lose value") and efficiency. In other words, the ideal complement to [retail banking](https://www.financedigest.com/the-power-of-digital-why-theres-still-life-in-the-traditional-retail-banks-yet.html "The power of digital: Why there’s still life in the traditional retail banks yet"). **Chatbots help [banks stay ahead](https://www.financedigest.com/singapore-digital-banks-a-tough-road-ahead.html "Singapore digital banks – a tough road ahead!") of competition** In a highly competitive [sector like retail banking](https://www.financedigest.com/how-effective-talent-management-could-disrupt-the-retail-banking-sector.html "HOW EFFECTIVE TALENT MANAGEMENT COULD DISRUPT THE RETAIL BANKING SECTOR"), customer retention is crucial and chatbots play a key role in delivering a competitive advantage. To stay ahead of the game, banks will have to offer high quality, fast and efficient customer [service that considers the specific needs](https://www.financedigest.com/financial-services-need-a-digital-transformation.html "Financial services need a digital transformation") of each individual customer. Thankfully, cognitive technologies and the new [generation of chatbots are here to help and banking](https://www.financedigest.com/how-can-banks-defend-the-latest-generation-of-scam-victims.html "How can banks defend the latest generation of scam victims?") institutions should make the most of them. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---