Conversational Banking Market Size To Reach USD 50 Billion By 2027

Conversational Banking Market Analysis (2023 - 2030)

The global conversational banking Market size is projected to reach USD 50 Billion by 2027. This market is witnessing a healthy CAGR of 30% from 2022 to 2027.

Digital banking utilizing voice, text messaging services, or visual engagement technologies is referred to as conversational banking. It implies that you can use messaging apps to communicate with the bank directly. Additionally, conversational banking allows financial institutions access to vital information about the intentions, ambitions, and financial behavior of their clients, allowing them to cross-sell products and services and provide pertinent guidance.

A millennial generation is a customer group with significant purchasing power whose behaviors will shape banking evolution soon. They exhibit better financial acumen and are at ease with app-based banking. We already know that millennials expect rapid banking experiences, but 58 percent of them say they also want individualized goods and services.The seamless integration of conversational banking tools with omnichannel analytics platforms makes it simple to gather information on customer preferences. The knowledge gained enables the development of tailored consumer experiences that can increase brand loyalty and even inspire brand evangelists. Finding cross-selling and upselling opportunities using it is highly helpful.

As a result of the pandemic, many businesses saw a major rise in consumer demands while seeing a decline in the number of available personnel. Due to lockdown restrictions, many contact centers were overwhelmed, forced to close, or both. This resulted in extended wait times for customer service requests, which harmed the customer experience. As companies adopt a more strategic approach to their continuing operations, which fosters resilience through adaptability and scalability, Conversational banking is becoming one of the most prominent technological enablers as we try to increase operational effectiveness.

Numerous problems that can be resolved quickly exist when it comes to the customer care pillar. Long hold periods on calls, tiresome inquiries that fatigue both clients and agents, missed deadlines, repeated case handovers, etc., are all irksome. With a 50% increase in human agent availability, voice bots have decreased call wait times. Automating mundane, repetitive operations can quickly cut costs by over 80%.Additionally, voice bots can assist contact centers in managing higher call volumes. Because they are more familiar with the sound of a real person's voice, they prefer voice calls to IVR calls or chatbots. When customers need a human-like voice during a crisis, voice bots help ease the pressure that could otherwise build up. When compared to other methods, they are simple to scale.

Due to its many advantages, such as content consumption, customer service, and other effective interaction models, conversational banking solutions are becoming more and more popular across industries. The benefits of chatbots, virtual assistants, and digital personal assistants are unknown to customers.India and Brazil, for instance, are the two nations that use cell phones the most, but they are less tech-savvy than developed nations like Europe and North America. Furthermore, according to a recent HubSpot poll, only 37% of customers are aware of AI technology, and 63% of people are unaware they are already utilizing it. Because of their complexity and lack of user understanding, virtual assistants are less likely to be used by people.Because of this, SMEs in these nations are hesitant to implement virtual assistants into their operational procedures. A higher degree of awareness is anticipated to be shown even in developing regions over the next five to six years, which will accelerate the adoption of conversational banking solutions.

Key Market Insights:

  • Self-service is preferred by 67 percent of customers over waiting for human agents to become available and respond to their questions. Using voice bots that respond to frequently requested inquiries so combines the best of both worlds, even though certain more complex requests could require human intervention.
  • While the solutions segment is anticipated to have a greater market share in 2021, the services sector is anticipated to develop at a higher CAGR throughout the forecast period. For conversational banking solutions to function, the services sector is essential. These services are handled by solution and service providers and are a necessary step in installing technology solutions. Global demand for improved customer service across key industries including BFSI, media and entertainment, and travel and hospitality is driving increased demand for conversational banking solutions.
  • North America is anticipated to have the greatest market size among these regions throughout the forecast period. The primary driver of the conversational banking market's expansion in North America is the rising demand for bettering customer support services to support efforts to retain customers. The growing number of companies in various countries is also anticipated to fuel the market for conversational banking.
  • During the projection period, the APAC region is anticipated to have the quickest growth rate. Additionally, during the projection period, the conversational banking market is anticipated to have significant advances and solution acceptance in the APAC region.
  • The European region is also recognized as being the second-largest market in terms of size over the predicted period.The rising need to reduce business processes connected to client engagement and retention is the key factor driving the adoption of conversational banking solutions in Europe.

Market Segmentation:

By Component

  • Solution
  • Service

By Type

  • Chatbots
  • Intelligent Virtual Assistants (IVA)

By Mode of integration

  • Messenger apps
  • Voice Assistants
  • Text Assistants
  • Mobile Banking App Assistants
  • Internet of Things

By Technology

  • Machine learning (ML) and Deep learning
  • Natural Language Processing (NLP)
  • Automated Speech Recognition (ASR)
  • Others

By Application

  • Customer Service
  • Back Office
  • Compliance & Security
  • Financial Advisory
  • Risk Management
  • Others

By Region:

  • North America
  • Europe
  • Asia-Pacific
  • Latin America
  • The Middle East and Africa

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