By 2025, the global chatbot market is projected to reach $1.25 billion, according to a report by Grand View Research. The industry is expected to thrive as more businesses realize chatbots help significantly reduce operating costs.
This is why it is no surprise that chatbots have nestled into most sectors, including retail, healthcare, and even banking. Research show it will really pay off for banks.
The operational cost savings from using chatbots in banking will reach $7.3 billion globally by 2023, up from an estimated $209 million in 2019, according to a new study by Juniper Research. Chatbots also are expected to save banks 862 million hours, equivalent to nearly half a million working years, in 2023. According to Juniper’s “AI in Fintech: Roboadvisors, Lending, Insurtech & Regtech 2019-2023, chatbots help them save time and money by resolving customer queries in a fully automated way.
As artificial intelligence (AI) and machine learning technologies evolve, chatbot features will be enhanced, eventually boosting their demand in the market. Since the technology can enhance user experience and save businesses money, chatbots of clearer path to mainstream adoption than ever before.
What Are Chatbots?
A chatbot is an interactive application created to interact with humans through textual conversations through messaging services, such as Facebook Messenger or Whatsapp. Many times, chatbots are created using artificial intelligence (AI) technology, but they also can be created using a set of rules.
Chatbots rely on natural-language processing to understand and respond to human demands and commands. Also, their abilities to understand human speech and respond intelligently continue to get better.
Data shows that chatbots are an important part of any business plan because more people are using messaging apps than social media to communicate.
Chatbots and Banks
Chatbots are being used in places that at first did not seem like a good fit, banking. Banks are using chatbots to help customers with simple payments and account inquiries as a way to save time and money. Banks always struggle with providing a quick, quality customer experience, and chatbots have been one solution for that problem. The most promoted of them is Bank of America’s Erica tool, which works with the financial institution’s mobile app to answer customer questions.
With growing consumer preference in banking on mobile apps, expect more banks to integrate chatbots into their businesses. This also helps them compete better with financial technology companies, which already are ahead on user experience, automation, and convenience.
Chatbots Making Their Ways into Other Types of Businesses
Despite some of having a tepid response to chatbots due to security and the loss of human interaction, more and more major companies, like Starbucks, eBay, Sephora, and British Airways have embraced their use.
As chatbots improve, expect more businesses to follow. In the future, interactive artificial intelligence will become the norm when it comes to customer service.
Those merchants that fail to start integrating AI and machine learning into their business will suffer because they will have failed to give customers complete, automated, streamlined experiences. That is something no merchant can afford.
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