Conversational Messaging Podcast by Gupshup

Episode 002: Conversational Banking: Transforming An Old System

May 20, 2021 Beerud Sheth and Srinivas Vijayaraghavan Season 1 Episode 2
Conversational Messaging Podcast by Gupshup
Episode 002: Conversational Banking: Transforming An Old System
Show Notes Transcript

In today’s episode of the Gupshup Conversational Messaging Podcast, Beerud and  Srini talk about how the banking industry keeps up with the digitized world. Together, they discuss the challenge of transforming offline and online banking to “conversational” banking, which makes banking seamless for all generations. They also discuss the three stages of this transformation: the marketing, transactional, and support stage. 

Making The Experience Seamless

Banks found ways to reduce consumers’ pain points by launching banking websites and applications. However, consumers still take a lot of time and effort to do simple transactions like payment, balance inquiry, money transfer, and such.  Beerud thinks that it’s more convenient if consumers are able to do everything in one go. How? By incorporating these easy transactions in messaging-like platforms 

“Search ads, social media ads, or other digital ads are the different entry points, whether it's offline or online advertising. From that, they come into this conversational experience where the users can customize their journey, as they discover and find the right product. That’s the marketing part.” - Beerud Sheth, CEO of Gupshup

Making The Experience Contextual 

Simple transactions are a perfect opportunity to upsell or cross-sell to consumers. Its success lies in making sure that the offers and recommendations for the consumers are timely and relevant, making it an added value to their experience. This contextual placement of transactions is a win not only for the consumers but more importantly, for the banks as this prompts more transactions from the consumers.  

Making The Experience Satisfactory

Beerud talks about how conversational banking positively affects customer satisfaction as it promotes unlimited availability and accessibility. Instead of making the consumers unhappy because of long hold times on the phone, conversational banking allows them to resolve conflicts at their own time and pace. Most importantly, with continuous development, this kind of banking with the highest regard to data security and user privacy can be the safest and most secure.

“If you spend a lot to provide the right experience, then your margins are lower. On the other hand, if you spend less, then you drive a lot of customer dissatisfaction. Conversation experiences in the customer support area allow you to have 24/7 availability.”  - Beerud Sheth, CEO of Gupshup

To know more about Conversational Banking,  listen to this episode.


Bio:

Beerud is the co-founder and CEO of Gupshup, the world's leading platform for cloud messaging and conversational experiences. It is used by over 30K+ developers and handles over 4.5 billion messages per month. He previously founded and led Elance (now Upwork, a publicly listed company), the pioneer of online freelancing and the gig economy.

Prior to founding Elance, he worked in the financial services industry – modeling, structuring, and trading fixed income securities and derivatives at Merrill Lynch and Citicorp Securities.

His graduate research, at the MIT Media Lab, involved developing autonomous learning agents for personalized news filtering. Beerud earned an M.S. in Computer Science from MIT & a B.Tech. in Computer Science from IIT Bombay, where he was awarded the Institute Silver
Medal.

Srinivas has over 2 decades of experience in running marketing for high-growth technology companies and managing corporate marketing, product marketing and demand generation.

Prior to Gupshup, he held marketing leadership positions with Qubole, Pluralsight, Mobileum and Tejas Networks.

Resources:

Gupshup.io



0:01

Listen to insights on how conversational messaging is changing the way businesses and their customers engage. Join Gupshup's CEO Beerud and VP for Marketing Srini, and an array of guests for conversations about conversations.


0:17

This is the Gupshup Conversational Messaging Podcast.


0:28

Hello, and welcome to another episode of the Conversational Messaging Podcast. This is your host, Srini. And I'm joined by your co-host Beerud. Today, we're going to be talking about one of the oldest industries in the world, banking and how banking is changing, in keeping with the digital world that we live in. The two words that you know, come to mind whenever you think of a bank, one is trust, because obviously, you trust banks with your money and your wealth. And the second word is convenience. Because you know, when when you visit a bank branch, or you go to an ATM, or you talk to an advisor, what you want is ease and convenience to get your, your job done. But due to various factors, two most important ones being how digital savvy consumers have become, and also, pandemic-related conditions. People are not visiting branches and ATMs as much as they used to. And they're relying on more digital channels to get their banking work done. So this, what we'll focus on is how this transition or transformation has been taking place for banks, and whether it has been a smooth one, or there have been challenges. So let me bring Beerud here at this point. We do think that this transition that banking has had from being purely an offline sort of an experience to having both branches as well as websites and apps. Has this whole journey been smooth? 


01:58

Yeah, no, I agree. I think just to sort of re-emphasize the the digital transformation that's going on, right? Certainly, I mean, software is eating the world, and in particular, the banking industry. And it's not just the pandemic, but even long before the pandemic, right? Internet and web technologies were really starting to transform banking, right? So the whole FinTech revolution, if you think about it, you know, some of the Neo banks that are emerging that are internet only, right, purely digital experiences, and they create this sort of really delightful digital experiences. And they've had tremendous success, like in the US, if you look at SoFi, you look at Affirm, you look at some of these other businesses, I mean, they've just, you know, really scaled up very, very nicely, right? So I think, you know, this whole world of branches and call centers, right, which was the old, customer touchpoints sort of getting transformed very, very quickly, right? It's no longer about walking into a branch or, or calling the call center, right? I mean, if you think about the average consumers experience, I mean, you know, walking into a branch means you at least have to budget, you know, half an hour to an hour or something, and,


3:18

you know, or calling the call center will be at least a 15-minute call, you know, very likely are on hold for some time. And even after you get through, you now have to authenticate, verify, certify, then sometime very likely, you'll get transferred between two or three different departments before you find the right person, and maybe they can help you or they can't, right? And I think the with these experiences, I think people have less and less tolerance for this, right? The bar is rising, the expectation of sort of a delightful customer experience is, is increasing. You know, another trend, again, sort of dating back a few years is, you know, I think, I think it probably started in Europe, if I'm not mistaken. But they, you know, I think there was, there was a set of regulations which said, Look, the data belongs to customers, right? And therefore, banks have to make it portable, right? You cannot, you cannot create customer lock in just by holding on to customer data. You have to make it accessible through an API to whichever service the customer chooses to use, right? And I think that they get started in Europe and in the US and elsewhere, which just led to these whole lot of these digital experiences that sit on top of the underlying banking industry. I think even in India, UPI is a fantastic example, right? 


04:42 

Right. 


04:41 

And think about it, the whole UPI ecosystem sits on top of the underlying banks, credit card, the digital experiences are built by non banking organizations. And consumers obviously, you know, they love those experiences, right? And it just sort of tells you it's not


5:00

sort of what's underneath, the, it's not the hardware layer, if I can call it that, right, if I can call the the physical banking infrastructure as the hardware layer that matters less than the software layer at the top, the the customer experience, and you're seeing a lot of this transformation playing, playing through, right? So the whole FinTech revolution, I mean, it's sort of snowballing into a bigger and bigger effect, more and more services coming in. And I think it's really a challenging time and process for traditional banks.


5:35

Yeah, totally agree. And I think any industry that, and not just banking, but across the board, when they transform a physical process into a digital one, I think, of course, one part of it is technology, which can, let's say take an account opening process or applying for a mortgage process and convert that into a series of digital steps on websites or an app, for example. But there is one key component of the, that human experience when you talk to somebody in a bank is the conversational experience. So when you have a conversation with someone, or they ask a question, tell me how this works. Tell me, what do I do here, what documents you need, and stuff like that. What's your opinion on how that crucial component is getting tran- or is getting added to the whole digital experience? 


06:25 

Yeah, I think, it's not so much adding or layering on, you know, the conversation piece. It's really just saying, okay, you.


6:34

So firstly, if you'll agree with the theme, or the trend that customers want delightful experiences, and and you need to go from physical or offline experiences to digital and online experiences, right? Then the question is, what's the best kind of digital experience you can enable? Right? And if you think about it, right, the first attempts, or the first obvious solution is to create a website. Of course, most banks have websites, right, want to create a mobile app? Right? Certainly, that was a huge step forward, online banking has has grown tremendously. App-based banking has grown quite a lot as well, and certainly a huge improvement over over the prior, you know, era of offline banking through branches and call centers, right? So clearly, it's working, and it's working well. The question then is, okay, if you want to take it further, right, if you want to take it, make it even more of a delightful customer experience, what's the, you know, what more can you do to make it more compelling? And I think that's where really, you know, conversational.


7:45

experiences are coming into play, right? And the way I like to think about it is, you know, conversation experiences are just the next sort of evolution in user interfaces, right? I think if you, I mean, I'll just take a two-minute detour. But if you look at, you know, the last 30, 40 years of personal computing industry, every decade or so, the interfaces change. In the mid 80s, it was all about the desktop, right? So you'd have a banking app, a desktop banking app, for example, to do banking transactions. And then in the mid 90s, when the BEB emerged, you had banking websites, and in the mid 2000s, in the app, ecosystem emerged, you had banking apps. And now, you have these conversational experiences of banking bots, really, and I think it's just the next phase in the evolution. And compared to all the prior interfaces, right? You know, conversation interfaces are more natural, more intuitive, easier to use, no training required. You know, and like the prior interfaces, that force, you know, humans to behave like computers by clicking on screens, buttons, and tabs, a conversation experience forces computers to behave like humans, right, which is you just ask your question and answers it, right? So no more clicking through lots of screens and tabs, or going through a very complex flow and wizard. You know, you really are just having a conversation and in the process of that conversation, you're getting, getting your work done. So I think certainly, I think it just in you know, it is just the the digital transformation continues. And you have, you know, as it moves towards better and richer and more delightful and easier, and more intuitive experiences, right? And I think instead of having to download an app, or commit to it, I think, you know, everybody leads busy lives. And sometimes when there's a, if you can make it a one click experience, right? It's a, it's a lot simpler and easier if users don't have to worry about yet another app. Right? Because crumbling you know, you need your banking apps. You need your commerce.


10:00

apps, you need your taxi and food delivery and, and so on. I mean, we have hundreds of apps that you're constantly switching across. And every app introduces some sort of effort and some overload. And you know, it may only be 5 or 10 clicks. But when you multiply that with dozens of apps, I mean, it really just becomes... so anything you can do to make it more frictionless, make it easier, simpler, quicker, right? And people spend so much time in their messaging app. So if you can bring the banking experience into the messaging app, it just so much simpler and easier for the consumer. 


10:39 

Yeah, and also, it makes it so much more inclusive. Because you know, every time a traditional industry goes to the digital space, you sort of leave out maybe older generations who are not of digital immigrants who have to learn something new, to be able to do what they used to do, like, if you take everyone from a baby boomer generation, up to the millennial generation, this kind of transformation where all you need to do is to be able to chat with the bank, or the bank bot, would make it a lot more inclusive for everyone, not just the digitally, digitally native customers, but also the digital immigrants to avail of these services and these digital experiences, I think, yeah, inclusivity is also another advantage. So switching tracks to, so going a little bit deeper into some of the key processes that you typically encounter in a bank. What are some of the top used cases of processes where you see this transformation taking place where conversational banking is manifesting itself?


11:42

Oh, you know, so at the highest level, I mean... So I think firstly, virtually, every customer touchpoint across the entire life cycle, right, is, I think, gonna get transformed by these conversational experiences. And you can take the life cycle and break it into maybe sort of three, high level sort of stages, right, there's the sort of the first is the marketing stage, if you will, right. And the second is sort of the commerce of the banking transactional stage. And the third is sort of support. And now, obviously, you know, people buy multiple products, and they may be at different stages in different products. But in general, you know, for any single product, I mean, that's sort of the case, you know, you sort of market and acquire the customer, then you enable and transact with the customer. And then you provide support. And, you know, people like to trade through that. And each of these has many different journeys and experiences that can be enhanced, improved, then made, you know, simpler, easier, more delightful, alright? 


12:53

So for example, in the, in the case of marketing, right, the ability to, to personalize and to contextualize offers, or, you know, instead of spamming lots of users, if, imagine if the user gets maybe just one message, but if they are interested or are looking for a product, then they come back and have a conversation, right? With the bot, and they, they guide the bot, they ask the questions, they make choices, they, they, you know, pre select themselves into certain products, it sort of the lead gen is sort of qualified and so on. But when this is user-driven, when the user is driving the conversation , with the help of the, you know, it's sort of, if the user is engaging in sort of an assisted purchase, right, and most financial products are fairly complex. I mean, buying an insurance policy or buying, you know, or taking a personal loan, or taking a mortgage, right, or a credit card. I mean, each of these products has a lot of fine print, has you know, lots of nuances. And different people have different levels of sophistication and different levels of understanding. So each may have a different kind of question, right? And to the extent that the user can can drive that, get comfortable, understand, you know, the whole product and suddenly really transforms the the marketing, sort of interaction, right, and sort of, it just makes it much more easier. And I think just to add on that marketing thing, also enabling many different entry points, right? Me, for example, even in branches, or any offline surfaces, maybe in print ads, or billboards, and so on. Imagine if the banks just put a QR code, right, that allows them to get into a conversation experience, to then customize their offers and see what it is they want, right? 


14:58 

So an entry point could be from offline or physical surfaces. It could certainly be from SMS messages that they may already be sending, like every bank today sends a lot of notifications. But each of those messages is an opportunity to bring the customer back into a more engaging conversation experience. Right? It could also be through any digital ads, right? Whether it's search ads, social media ads, or other digital ads, and so on. So these are sort of the different entry points, right, whether it's sort of offline or online advertising. And from that, they come into this conversational experience where they can customize, the user can customize their journey, as they discover and find the right product, and so on, right. So that's sort of the marketing part.


15:49

If we get into sort of the second stage, which is around commerce, and in the context of banking, what that means is making it easier for customer to customers to transact. So whether it's simple things like you know, what's my balance, or I want to transfer some money, or make a payment, or pay my bill, or


16:09

maybe buy something new, it's a great, you know, all of these conversation experiences are also a good opportunity to upsell and cross sell, different products. And if you have a credit card, maybe you want a loan, if you have a loan, you know, maybe you want to buy insurance, maybe mutual funds, and so on, right? So it's an opportunity to, to really cross sell upsell, in a very personalized way, depending on what the user wants to do, and so on. So I think there's a


16:44 

It's also about the right time, right? That's the, the timing is also very, very important. I think when you spoke about cross sell, it also reminded of what you mentioned, on the marketing side as well, that, let's say you've you really, you've just purchased something, and you get a transaction alert. But the transaction alert could be an opportunity for the bank to maybe cross sell a loan or, or a credit card or something that's related to a big spend that you've already done. So I think that's probably one manifestation. 


17:11 

Yeah, exactly. I think context is, is really, really critical, right? I think. And when you make the experience contextual, it has a huge impact. Right? I think just to give you another very clear and specific example. Today, for example, banks send out notification saying your bill is due tomorrow, right? And now the user has to go into either the banking app or a payment tab, right, find the merchant, you know, enter the amount and then actually make the payment. And oftentimes the user says, "Oh, I'm in a meeting, I'm busy. You know, I'll do it later." And then they forget, and then it leads to penalties. And, and also, the bank has lower collections and so on. I mean, wouldn't it be nice if that payment reminder message included a button, which says pay now. And literally with one click, you can make the payment? Right? So it's it's contextual placement of the transaction. And when the user sees that, they'll say, Yeah, I want to pay it, but now you because you made it easy, very likely, they'll do it that very instant, which means, you know, the collection cycles are shorter, the collection rates are higher. And even for the consumer, the penalties are lower. It's it's a win win for both sides, right? So this is a


18:24

really good example of how customer experience can really transform the economics for both consumers and banks as well. Right. So I think really, making it simple, easy, frictionless, very contextual, very personalized, makes a huge difference, okay? And just to finish, sort of our walk through the customer lifecycle, you know, let's talk about the third stage, customer support, right? People, invariably, in banking, I mean, these are complex products, complex relationships, there's always a need, you know, to call the bank to call the customer support team, you know, to, to find out, you know, why this charge? What happened? You know, what dispute and so on? Right? So I think in there, right? The ability to have... Think about one of the most challenging things for banks is call centers are expensive, because every incoming call is very expensive to handle. And therefore, you end up with two choices, right? Either either you have to spend a lot, and really, if it's a, it's a very competitive low, you know? 


19:32

sort of business. And if you, if you spend a lot to provide the right experience, I think, then your margins are lower. And on the other hand, if you spend less, then you drive a lot of customer dissatisfaction, right? So but, but again, conversation experiences in the customer support area, allows you to have sort of 24/7 availability. You know, you don't have to worry about peak versus off peak, right? It can handle unlimited capacity, the instant responses, right, so consumers don't have to wait or stay on hold.


20:03

Which means, you know, in some, some businesses are doing even IVR deflection, meaning an incoming IVR call comes in, and you know, the queue is long, so they just announced a message saying,


20:17

"Look, you're welcome to wait on hold. Or we can send you a message and engage in a conversation experience through messaging that will take care of your query very quickly." And they send you know, if you want to do that press one, for example. And once the user receives that message, they can finish the rest of the interaction through messaging, right? So you're sort of deflecting the customer interaction from an incoming call to the messaging base, perhaps automated experience, and so on. So I think


20:48

it can really transform. I think, even I should have mentioned earlier, some of the frequently occurring journeys, right, like KYC. I mean, KYC is another big thing where almost every financial product requires some KYC, verification and sort of that, or even collections when it comes to loans, you know, the collections journey, and so on. So each of these things, there's just so much friction that can be taken out, right? You can just by leveraging conversation experiences, and I think these things is, you know, you're seeing some of the newer Fintech players. Yeah, jump onto these sort of newer opportunities, newer services, and so on, right? And I think in a very hyper competitive market, that's abortion capital. I mean, you see a lot of these companies getting funded.


21:39 

Yes


21:40

I think the only real way to differentiate is through customer experiences. 


21:48

Yeah, totally agree. And when we started the episode, we spoke about the word trust, I think one of the one of the things that always one of the questions are always cropped up when you're applying technology and digital to anything related to finance is security and safety. So how can we ensure/secure banking in a conversational banking sort of world?


22:12

Well, you're right, I think, you know, the, the regulators, and the banks, you know, the chief security officers that all of these organizations are extremely conscious, and, you know, focused on on this issue, except that some other traditional technologies don't give you the full level of security, right? And oftentimes, you have unencrypted clear text messages, you know, carrying account balances and sensitive information going through messaging channels, right. So I think it's important to, there are newer tools and technologies emerging that enable


22:48

either end to end encryption, or better still, sort of, you know, mechanisms where the data stays purely between the bank and the customer, it doesn't even come in through any intermediary, and so on. So I think it's sort of ensuring a high level of data security and user privacy is, is very, very critical. And it's now possible with newer messaging channels. 


23:14 

So let's just imagine one user journey, just for our listeners. So today, I received a text message saying, "this is your remaining balance." So how will that change in the world of conversational banking? Will I even see the amount on the text message or?


23:32

Yeah, so no, right? So you could... Today, it says, you know, "here's your balance." But tomorrow, it could say, "for example, to see your balance, click here," right? And when they click on it, it opens up a little conversational surface where the balance is shown. And by the way, even there, you can make it time bound, so the balance can disappear. You know, it's a little bit like Snapchat, right? Where the message can disappear after after 10 seconds or 20 seconds, or it may be only one-time access, so a second time, person would not be able to check it if they came back. And then in addition to that, there are other options right there, right? So if you want to dispute it, or get some more details, or, you know, find out why, you know, what, whether your transactions have cleared or not, I mean, you can find it out right there. And by the way, while you're in that journey, all of the rest of it can happen, right? There could be some cross selling some upselling. You know, some pending items can be notified as well. And so on, right. And all of that, like literally, with a few clicks, right? Everything is a like a one click experience, right and in it just a lot quicker, faster, simpler, easier and extremely secure.


24:55 

Right. So, thanks for your views. Beerud. And if our listeners want more information, feel free to visit


25:00

gupshup.io where we, we worked with a lot of banks in our journey up until now and you can see some of the success stories of them having brought in the conversation element into their digital banking processes. So thanks for your time today, Beerud, and thanks to our listeners for tuning in. Until next time.z