What is conversational banking?

09. 05. 2025.

The financial industry is undergoing a digital revolution, with traditional methods of banking being replaced by faster, more efficient, and customer-friendly solutions. Among the latest innovations in this space is conversational banking.  

But what exactly is conversational banking, and why is it gaining traction?  

Defining conversational banking 

Conversational banking refers to the use of artificial intelligence (AI), chatbots, voice assistants, and other communication technologies to enable customers to interact with their bank in a more natural, intuitive way.  

Instead of navigating through complex menus or visiting a physical branch, users can now engage in real-time, human-like conversations via text or voice to access banking services. 

This innovative approach allows customers to perform various tasks, such as checking account balances, transferring funds, applying for loans, or even seeking financial advice, without the need for lengthy processes or waiting times. Essentially, it makes banking as simple as having a conversation. 

How does conversational banking work? 

It may seem complicated, but the answer is very simple. Conversational banking uses several advanced technologies to create a seamless customer experience.  

What are the key components that make it up? 

Artificial Intelligence (AI) 

AI powers the core functionality of conversational banking. Machine learning algorithms analyze customer queries and provide accurate, relevant responses. Over time, these systems improve by learning from past interactions, enabling better personalization and accuracy. 

The role of AI agents in conversational banking 

Let’s take a closer look at AI agents in conversational banking. What role do they play, and how do they help banks optimize processes and reduce operational costs? 

AI agents and voice bots provide 24/7 customer support, answering common inquiries about account balances, transactions, loans, and other banking services. They reduce the workload of contact centers and speed up query resolution. 

By analyzing data, AI agents can offer personalized financial advice, suggesting savings strategies or loan options based on each client’s habits and financial plans. 

Imagine a small business owner asking a virtual assistant: “How much did we pay to Telekom last year?” Conversational banking simplifies this process: the AI agent instantly recognizes the request, searches all relevant transactions, and returns the total with a clearly formatted response: “You paid a total of 4,215 EUR to Telekom during 2023, across 12 transactions.” 

A financial director of a large company can easily ask: “Which five business cards had the highest spending last month?” Instead of downloading reports and analyzing data in Excel, conversational banking immediately provides a list of cards with their spending amounts, and even spending trends if needed. This saves time and eliminates the need for additional software tools. 

For users who avoid m/e-banking due to fear of technology, conversational banking offers a more natural, simpler interface that feels like an ordinary conversation, but with added security layers that ease their concerns. 

For example, an elderly user, who finds menus and options in m-banking apps confusing, can simply say: “I want to check my account balance.” Without having to navigate through multiple steps, the AI agent will respond directly, with automatic identity verification (e.g., through voice recognition or a simple SMS confirmation). 

Although it may seem that way, this technology is not here to replace m/e-banking but to enhance it, providing users with a better, faster, and more secure experience. 

Natural Language Processing (NLP) 

NLP enables chatbots and virtual assistants to understand and process human language. Whether a customer is typing or speaking, NLP helps interpret the context and intent behind the query, allowing the system to respond appropriately. 

Multichannel Integration 

Conversational banking can be accessed across multiple platforms, including: 

• Mobile apps 

• Messaging platforms like WhatsApp, Facebook Messenger, or Viber 

• Smart speakers (e.g., Amazon Alexa or Google Assistant) 

• Bank’s website chat interfaces 

This multichannel approach ensures customers can engage with their bank anytime, anywhere, and on their preferred device. 

Personalization 

One of the standout features of conversational banking is personalization, its ability to offer personalized services. By analyzing user data, such as transaction history and spending patterns, the system can make suggestions, such as budgeting tips or loan offers for each client. 

Benefits of conversational banking 

Conversational banking brings numerous advantages for both clients and financial institutions. What is this advantage and how to use it best? 

Benefits for Customers 

This type of banking allows customers to access banking services 24/7, eliminating the need to visit a branch or wait in call center lines. Whether it’s early in the morning or late at night, users can complete their desired transactions quickly and easily. This flexibility is especially valuable for those with busy schedules or in emergency situations where immediate banking services are needed. 

Ease of use is another key advantage.  

Customers don’t have to navigate through complex menus or understand technical terminology. They simply need to ask questions in their own words, making the entire experience intuitive and user-friendly. With this approach, tasks such as checking account balances, transferring money, or paying bills can be completed in just a few seconds through a simple conversation. 

In addition to speed and convenience, AI in conversational banking offers personalized advice based on an analysis of the customer’s financial behavior. This includes recommendations for savings strategies, cost optimization, or even investment opportunities. As a result, customers receive not only technical support but also practical guidance for better financial management, contributing to their long-term financial security. 

Benefits for banks 

Automating routine inquiries and transactions allows banks to achieve significant cost savings. Instead of depending on large customer support teams for simple tasks like balance inquiries or bill payments, chatbots and virtual assistants handle these efficiently. This not only reduces the workload on human staff but also enables them to focus on more complex customer needs, streamlining operations and cutting expenses. Over time, these savings can be reinvested into enhancing services and technology. 

Another major advantage is improved customer engagement.  

By enabling quick, personalized, and seamless interactions, conversational banking helps foster stronger relationships between banks and their customers. When users receive prompt responses and customized advice, they are more likely to feel valued, which leads to higher satisfaction and loyalty. This enhanced engagement can also boost a bank’s reputation and increase customer retention rates in a competitive financial market. 

Data insights are an invaluable byproduct of conversational banking. Every interaction provides banks with a wealth of information about customer preferences, behavior, and needs. By analyzing this data, banks can refine their services, tailor their product offerings, and develop highly personalized marketing campaigns.  

For example, a bank could identify patterns in savings habits to recommend specific financial products or investment opportunities to individual customers. This data-driven approach not only improves customer satisfaction but also creates opportunities for revenue growth. 

Although the concept itself is not new in a general sense, the implementation of conversational banking could proceed in several phases, gradually. It wouldn’t be a bad idea to first offer and test new options on specific customer segments. For example, starting with clients who are confidently assumed to be digitally literate or those who are already active users of mobile banking. Based on the results from these groups, the implementation and strategy development for other customer segments would be much easier. 

Finally, conversational banking enables scalability, an essential factor for modern financial institutions. Unlike human staff, agents and virtual assistants can manage multiple interactions simultaneously, making it easier for banks to handle large volumes of customer queries. Whether during peak times or emergencies, this scalability enables consistent service quality without delays. By adopting conversational banking, banks can efficiently meet the demands of a growing customer base while maintaining operational efficiency and customer satisfaction. 

Use cases of conversational banking 

From account management to fund transfers, users can handle essential tasks through quick and intuitive conversations. Checking account balances, reviewing transaction histories, and updating account details can be done effortlessly without visiting a branch or navigating complex systems. Sending money is equally straightforward; a simple command like “Send $100 to John” provides instant processing, while bill payments are streamlined with automated reminders and hassle-free transactions. Additionally, customers benefit from personalized financial advice tailored to their needs, including budgeting tips, saving strategies, and investment recommendations, all powered by intelligent virtual assistants. 

Beyond convenience, conversational banking enhances security and streamlines complex processes. Applying for loans no longer involves tedious paperwork, as chatbots guide users through the process step by step while providing real-time updates.  

The level of security in conversational banking is enhanced through advanced authentication methods that enable reliable user identity verification, even without the need for standard login procedures that reduce user convenience. The key lies in combining multiple layers of security, including biometrics, behavioral analysis, and contextual authentication. 

Security features, such as fraud alerts, ensure customers are promptly notified of suspicious account activities, enabling immediate action to protect their finances. By integrating these capabilities, conversational banking not only improves user experiences but also empowers banks to operate more efficiently while maintaining customer satisfaction and trust. 

The future of conversational banking 

Although it is still in the early stages of development, conversational banking has enormous potential and is entering all areas of finance with great strides. As AI and NLP technologies continue to evolve, we can expect even more sophisticated and human-like interactions. Future advancements may include: 

• Greater integration with voice assistants and wearable devices. 

• Enhanced personalization through real-time data analysis. 

• Multilingual support to cater to diverse customer bases. 

• Deeper integration with other financial services, such as insurance and investment platforms. 

Conversational banking is revolutionizing the way customers interact with their banks, offering a faster, more personalized, and user-friendly experience. By leveraging AI, NLP, and other cutting-edge technologies, banks can not only enhance customer satisfaction but also streamline their operations and gain valuable insights into customer behavior. 

For financial institutions looking to embrace this innovation, Thing Solver provides all the tools needed for an exceptional conversational banking experience. By implementing their solutions, banks can truly understand what their customers want and deliver exactly that, positioning themselves at the forefront of modern banking. 

As this trend continues to grow, it’s clear that conversational banking isn’t just a passing phase.  

It’s the future of banking.  

For both customers and financial institutions, embracing this innovation means stepping into a more convenient, efficient, and connected banking era.